RCBC 2024 Sustainability and Impact Report

2 0 2 4 SUS T AINABILIT Y AND IMP A C T REPOR T

About

the Report

For the third consecutive year, RCBC has combined its Sustainability Report and Impact Report, underscoring the Bank's unwavering dedication to embedding sustainability into every facet of its business.

This 2024 Sustainability and Impact Report (SIR) reflects the Bank's commitment to driving positive change by UNLOCKING SUSTAINABLE OPPORTUNITIES that address global challenges and foster growth for all stakeholders.

The Report highlights these significant milestones:

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Contents

• Delivering Excellent Customer Experience through Digital Strategies, Innovation and Inclusion. RCBC continues to provide best-in-industry products with corresponding innovations that are able to bring banking services closer to MSMEs and those in rural areas.

• Boosting Support for Renewable Energy (RE). The Bank has surpassed its target of increasing its RE portfolio

  by 10% to 15%, having reached an exceptional actual RE portfolio growth of over 80% from 2023 to 2024.

  In addition, RCBC headquarters at the RCBC Plaza and AT Yuchengco Center (ATYC) are now 100% RE-powered, certifying the Bank's conscious effort to integrate sustainability in its day-to-day operations.

• Upholding the Passion for Capacity Building Activities in Sustainability. Recognizing that knowledge and awareness are key towards climate action and sustainability as a whole, RCBC has remained active in various knowledge-sharing activities, both internally and externally. RCBC continues to believe that empowering the mind propels action, and action leads to results even amidst the evolving nature of sustainability.

• Scaling Up Transparency in Climate Risk Management. Through the Bank's continued commitment to the Partnership for Carbon Accounting Financials (PCAF), reporting on the Financed Greenhouse Gas (GHG) emissions have been expanded to incorporate consumer loans (housing loans and motor vehicle loans) and scope 3 for all sectors for its business loans portfolio. These information deepen the Bank's understanding of GHG emissions and provide valuable insights for data-driven climate scenarios and possible goal-setting.

• Supporting all 17 UN Sustainable Development

  Goals (SDGs). Cognizant of the Bank's role in development, the Bank has now mapped out its contributions to the

  17 UN SDGs through its Sustainable Finance Framework and various programs and projects focused on financial inclusion and innovations.

• RCBC also continues to strengthen relationships

  with clients in sustainability. Starting April 2025, RCBC's Hexagon Club members are given the opportunity to support the Haribon Foundation for the Conservation of Natural Resources Inc. (HARIBON) through direct donations or by using their credit card points.

  Reporting Frameworks

  This Report was designed in accordance with these references:

• Sustainability Reporting Guidelines for Publicly Listed Companies under the Securities and Exchange Commission (SEC) Memorandum Circular No. 4 Series of 2019.

  Consistent with the SEC's guidelines on Sustainability Reporting, these four material topics are extensively discussed:

  • Economic

  • Environment

  • Social

  • Contributions of RCBC products and services to the UN SDGs

• BSP Circular 1085 and BSP Circular 1128. These mandate banks to adopt a Sustainable Finance Framework and require banks to integrate environmental and social risks in the Environmental and Social Risk Management Framework, respectively.

• RCBC's Sustainable Finance Framework, as amended

  in February 2024. Under this Framework, RCBC publishes an Allocation Report and an Impact Report that conform to the disclosure requirements of BSP Circular 1085.

  Reporting takes place a year following the issuance of the Sustainable Financing Instruments (SFIs) and renewed annually until the full allocation of the net proceeds.

  • The Allocation Report shows how the net proceeds from the SFIs are distributed in the Eligible Green (with a subset of Eligible Blue) and Social Portfolio.

  • The Impact Report shows the aggregated impact of the Eligible Green (with a subset of Eligible Blue) and Social Portfolio as well as the impact of the Eligible Green (with a subset of Eligible Blue) and Social Portfolio based on the UN SDGs.

• PCAF's Global GHG Accounting and Reporting Standard Part A: Financed Emissions (Second Edition).

  RCBC's disclosure on its financed GHG emissions is based on the PCAF's methodological guidance for asset classes, particularly for business loans, motor vehicle loans and mortgages. The following are included in the disclosure:

  • Financed Emissions, representing RCBC's Scope 3 GHG emissions. This effectively supplements the SEC guidelines on Sustainability Reporting (limited to disclosure of Scope 1 and Scope 2 GHG emissions).

  • Avoided Emissions, derived from loans to Renewable Energy projects. In accordance with the PCAF Standard, these projects "can result in emissions being avoided as they displace the emissions

    that normally would have occurred without the project's implementation."

  • Data Quality Scoring, in recognition of data limitations. Inputs in applying the PCAF Standard formula rely on assumptions that depend on the available data. According to the PCAF Standard, this data quality scoring "enables financial institutions to develop a strategy to improve data over time."

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About RCBC

At the Forefront of Sustainability Message from the Chairperson President's Report

Sustainability Impacts at a Glance RCBC on Sustainability Stakeholders

Economic Impact Environmental Impact Social Impact

Contribution to the UN SDGs Content Indexes

Key Definitions

2024 SUSTAINABILITY AND IMPACT REPORT UNLOCKING SUSTAINABLE OPPORTUNITIES

About RCBC

Established in September 1960, Rizal Commercial Banking Corporation (RCBC or the Bank) started operations in the province of Rizal under the name Rizal Development Bank. RCBC received approvals from the Bangko Sentral ng

At the Forefront of Sustainability

Pilipinas (BSP) to operate as a commercial bank in 1963 under its current name and then as a universal bank in 1989. For over sixty years, the Bank has been a pillar of the banking industry in the Philippines with a wide range

of services in investments, microfinancing and overseas remittances among many others.

RCBC is a member of the Yuchengco Group of Companies (YGC), a premier business organization in the Philippines covering over 60 businesses involved in a wide range of financial and non-financial services. YGC is recognized

as one of the oldest and largest conglomerates in Southeast Asia. RCBC is a publicly-listed company (Stock Code: RCB) in the Philippine Stock Exchange (PSE).

RCBC solidified its position as the fifth largest private universal bank in the Philippines posting a consolidated net income of Php 9.5 billion in 2024 and total assets

of over Php 1.36 trillion. Consumer lending momentum is led by credit cards, auto and housing loans with

40% growth. As of end 2024, the Bank had a total consolidated network of 465 branches and 9,908 ATMs1.

As a diversified financial institution, RCBC serves corporate and individual banking needs through multiple customer channels offering innovative products and services to various markets. RCBC's inclusive financial business model expanded in 2010 when it ventured into the microfinance business via Rizal MicroBank (RMB, the thrift bank subsidiary) to serve the unbanked and underserved segments of the country's population. RMB is one of

the more recent affiliates of YGC. RMB mainly provides loans to microenterprise and small business operators as well as agricultural value chain players.

RCBC remains to be a leader in sustainable banking. The Bank has been lauded as: "Best Bank for Sustainable Development Philippines" at the 2024 Global Banking & Finance Awards; recipient of the "3G Eco-Friendly Financial Services Award 2024" and "3G Best Sustainability Framework Award

2024," both at the 9th Global Good Governance Awards in April 2024; "Circle of Excellence Awardee for Sustainability Company of the Year" at the Asia CEO Awards 2024; and "The Asset Benchmarking Award for Excellence in Environmental, Social, and Governance (ESG) - Platinum Award, 2024" by the Asset ESG Corporate Award.

RCBC also recognizes that digitalization is a key driver of sustainable practices and development. These digital innovations have propelled RCBC to new heights.

In 2024, the Bank was named "Best Bank for Digital" by Euromoney (formerly AsiaMoney) for the fifth consecutive year and scored multiple global awards, including the sole Philippine winner as "Sustainable Innovator" at the Singapore FinTech Festival (SFF) FinTech Excellence Awards; twin recognitions from Asia CEO Awards as Most Innovative Company of the Year and Sustainability Company of the Year; triple wins in the Infosys Finacle Innovation Awards in the following categories: Business Model Innovation (DiskarTech), Maximizing Customer Engagement (Pulz), and ESG-Led Innovation (ATM Go); Best

SME Financial Inclusion Initiative in the Global SME Banking Innovation Awards 2024 (ATM Go), Best in Future of Customer Experience in the IDC Future Enterprise Awards 2024 (Pulz), and the Best Customer Experience Bank in the International Finance Awards 2024.

1 Includes ATM Go terminals (RCBC's handheld ATM facility enabling banking transactions outside branches and ATMs)

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2024 SUSTAINABILITY AND IMPACT REPORT UNLOCKING SUSTAINABLE OPPORTUNITIES

MESSAGE FROM THE CHAIRPERSON

Beyond the Now: Seizing Opportunities for the Future

For nearly 14 years since we started our sustainability journey at RCBC, we have seen many challenges that make our dream of a healthy and just planet seem elusive.

2024 was a year when these challenges were most abundant:

• We felt the hottest day in recorded history.2

• We found out that we have lost 73% of our wildlife population over the past 50 years.3

• The world suffers economic losses to the tune of USD200 billion a year due to extreme weather disturbances.4

• The Philippines is seen to suffer the heaviest economic losses (equivalent to 3% of GDP or USD12 billion) among 36 countries most at risk from intensifying weather hazards driven by climate change.5

• Some companies started to scale back on previous commitments to climate action, and diversity and inclusion, after the U.S. presidential elections and the pivot in the U.S. government's position on these.

These challenges compound the impact of the war between Russia and Ukraine, the armed conflicts between Israel and Hamas, and the geopolitical tension in the West Philippine Sea, which have been going on in recent years.

The path ahead is formidable and there is still much to be done to create a more prosperous, inclusive, and

sustainable future for generations to come.

Turning 2024 into a Banner Year for Sustainability

2024 may well be the toughest year for sustainability yet we at RCBC continue to persist, recognizing our responsibility as a leader in sustainable finance in the country. Being the Philippines' fifth largest privately owned universal bank, RCBC plays an important role in mobilizing funds that will help meet the needs of a

growing Filipino population, and help secure the future of the generations who will inherit this planet.

Against the backdrop of growing global challenges, we managed to transform 2024 into a year of sustainability milestones.

• We have updated our Sustainable Finance Framework to align with more recent developments in the global standards on promoting responsible financing and protecting natural resources.

• We raised a total of USD400 million from the issuance of 5-year sustainability bonds in January 2024, and another USD350 million in January 2025, bringing the total amount we have issued to USD2.1 billion in sustainable financing instruments. These reflect continued investor confidence

  in our sustainability thrust to fund projects with clear environmental and social benefits.

• We are on track with our commitment to fully divest

  from coal-powered projects by 2031 and shift to financing renewable energy and other sustainable sources of energy. We ended the year with a total sustainable portfolio that is four times higher than our remaining exposure to coal power generation.

• Our pioneering Peso Green Time Deposit, which enables Filipinos to invest as low as Php5,000 to fund green projects, has gained greater traction, particularly among seniors and self-employed individuals.

• For the third consecutive year, RCBC received the "Platinum Award" from The Asset ESG Corporate Awards recognizing our unwavering commitment to integrate sustainability into our corporate governance and banking services.

Unlocking Sustainable Opportunities

The global economy is pursuing the path to sustainable growth despite its vulnerabilities such as geopolitical disputes and shortages of resources, energy, and labor. In times of change and uncertainty, the tendency is to choose: "Profit or planet? Give back or cut back?"

We are very fortunate that we did not have to weigh these options at RCBC. Because we know that sustainability is doing the right thing. So, we always look beyond

the obstacles and find meaningful opportunities for our customers, employees, partner communities, and other stakeholders.

While carbon emissions around the world are still on the rise, there are some exciting progress in certain parts of the world. Global investment in clean energy technology and infrastructure is estimated to reach USD 2 trillion in 2024, twice the amount going into fossil fuels.6 The sale and manufacture of electric and hybrid vehicles are also gaining traction. In the Philippines,

it is projected that the sales of EVs will reach an annual purchase volume of 20,000 units for the first time in 2025, accounting for 4% of the estimated 500,000 vehicle purchases for the year.7 This global transition

to a low-carbon economy will unlock enormous opportunities for banks and financial institutions,

as borrowers will seek new financing for sustainability and climate solutions.

There are also emerging growth opportunities from the advent of generative AI and the rapidly growing demand for digitalization. For one, AI and data science can support financial institutions and investors in evaluating the financial risks of climate change on their portfolios. By providing better risk assessments and predictive models, AI can help us identify truly sustainable companies that we can finance.

Together in Sustainability

Given the rising complexity of the world's problems, the role of sustainable finance has never been more important. The path ahead is formidable and there is still much to be done to create a more prosperous,

inclusive, and sustainable future for generations to come.

In this sustainability journey, I am grateful and take great pride in leading an organization that has always maintained a strong sense of purpose, hard work, and perseverance. I am confident that our collective courage, efforts, and dedication as One RCBC Family will allow us to accelerate action at scale and speed, to support a future that is greener, healthier, and just.

HELEN YUCHENGCO-DEE

Chairperson

2 https://www.nasa.gov/earth/nasa-data-shows-july-22-was-earths-hottest-day-on-record/

3 https://livingplanet.panda.org/en-GB/

4 https://www.swissre.com/press-release/Economic-losses-set-to-increase-due-to-climate-change-with-US-and-Philippines-the-hardest-hit-Swiss-Re-Institute-finds/3051a9b0-e379-4bcb-990f-3cc8236d55a1

5 https://www.swissre.com/press-release/Economic-losses-set-to-increase-due-to-climate-change-with-US-and-Philippines-the-hardest-hit-Swiss-Re-Institute-finds/3051a9b0-e379-4bcb-990f-3cc8236d55a1

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6 https://www.reuters.com/sustainability/climate-energy/iea-expects-global-clean-energy-investment-hit-2-trillion-2024-2024-06-06/

7 https://business.inquirer.net/508320/ev-sales-in-ph-seen-hitting-20000-in-2025

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2024 SUSTAINABILITY AND IMPACT REPORT UNLOCKING SUSTAINABLE OPPORTUNITIES

Some businesses are quick to scale back on their

PRESIDENT'S REPORT sustainability commitments. Did they not really view sustainability as the "right thing to do" but

rather as a cost driver and a necessary checkbox

Looking Ahead and Beyond

Lately, we have been seeing significant policy shifts in key sustainability issues such as climate change

Doing the Right Thing is its Own Reward

When I was a kid, I often saw the slogan "Read Today, Lead Tomorrow" in weekly newspapers. It sounded sensible, but did people intend to read to become leaders in the future? I did not. I read just for the

sheer love of books and the joy of reading, not expecting anything in return.

It's a fact of life that quid pro quo or transactional relationships are inevitable - be it in business, politics, or love and friendships. In banking, you lend money and naturally expect to be paid back with interest.

Otherwise, it's charity.

Not all the things we do, however, need to be transactional, especially when it comes to doing the right thing.

In 2015, when all the member-countries of the United Nations adopted the 2030 Agenda for Sustainable Development, there was no expectation of anything in return. A total of 193 countries - whether developed, developing, or least developed - embraced the

ambition to pursue the 17 UN Sustainable Development Goals (SDGs). They all recognized that everyone is on the same boat, and they must all work together to build a better world.

Going Beyond Box-ticking

In the age of digital technology and in the face of climate change, this global interdependency has never been more important. One country's

actions can lead to extreme weather events such as droughts and floods that can harm the entire planet. One country's policy pivot can scuttle the

world's progress towards achieving the SDGs. These possibilities loom large now that the tide is turning.

Sustainability is in our own best interest.

There is no other way, no single quick fix to all the world's problems.

to be branded "sustainable"?

For RCBC, there is no turning back.

When we embarked on our sustainability journey in 2011 with the implementation of an Environmental and Social Management System (ESMS), we already knew this is going to be more than just an advocacy, but an integral part of our business strategy.

After eight years, in 2019, we developed our Sustainable Finance Framework (which was updated in 2024), but still became one of the earliest adopters of Bangko Sentral ng Pilipinas (BSP) Circular 1085, mandating

all Philippine banks to integrate sustainability in their governance frameworks, risk management systems, strategies, and operations.

In the span of 14 years, RCBC has emerged as a leader in sustainable finance. I would like to think this is partly because we made sustainability a part of our corporate DNA and aligned with our corporate values. We adopted

a holistic approach that focuses, not only on the external impact of our and our clients' operations, but also on our internal practices, culture, and employees.

Reaping What We Sow

One of the biggest benefits of embedding sustainability into our operations is the lasting value we provide to our clients. Leading by example, we have been reducing our own environmental footprint within our organization.

We create a ripple effect by taking into consideration the emissions from our supply chain, as well as assess the environmental impact of our clients' operations when we make lending decisions.

As of end-2024, RCBC has mobilized over Php120 billion for approximately 19,000 projects in its Eligible Sustainable Finance portfolio.

Another benefit of integrating sustainability into the business is the strengthened reputation and stakeholder trust it helps build.

In January 2024, RCBC returned to the offshore debt market and issued USD400 million in five-year senior unsecured sustainability notes. The issuance was almost six times oversubscribed at USD2.4 billion, reflecting global investors' continued confidence in the bank.

This was followed by another USD350 million in sustainability bond issuance in January 2025, bringing our total issuances so far to USD2.1 billion in sustainable financing instruments.

The commitment we made four years ago to cease funding for new coal-fired power plants and zero out our remaining exposures by 2031 remains firm. We have shifted our efforts to extend more credit to renewable energy projects, which accounted for around 42% or the lion's share of our total sustainable portfolio as of 2024, and have markedly surpassed our remaining exposure to coal power projects.

and diversity, equity, and inclusion due to changing political and legal landscapes in the United States.

High-profile firms have been cutting back

and re-evaluating their strategies, and this is likely to reverberate across the world.

Amidst the challenges from this policy sea change, there are strategies we can adopt to navigate the future. One is to hold strong to our values, to who we are as an institution, and what we believe in. Even if policies pivot, we must uphold our sustainability principles to stay competitive and relevant.

We must remain heart-strong and vigilant in monitoring market and regulatory trends.

We must continue to engage with our stakeholders to ensure that our sustainability efforts are aligned with their needs and goals.

We must also relentlessly harness new technologies and innovations such as using artificial intelligence, machine learning, and data science to reduce our environmental footprint, improve our efficiency, and manage risks better.

As sustainability continues to be a key driver in our business success, we should also unlock opportunities to diversify our product and service offerings to meet the demand for green alternatives. An example is the green time deposit we launched in 2022, a first-of-

its-kind in the country that promotes environmental awareness while saving funds.

Building sustainability into our business has allowed us to remain relevant in the past 64 years, and even in the next 60. Without embracing sustainability principles, RCBC will just be another lender offering a quid pro quo relationship and driven by short-term commercial goals.

Sustainability is in our own best interest. There is no other way, no single quick fix to all the world's problems. Technology can only take us so far. No company, country, investor, or individual can do it alone. Each of us has to do his or her part. Each of us can be a change maker.

Each of us has the potential to change the world.

EUGENE S. ACEVEDO

President and CEO

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2024 SUSTAINABILITY AND IMPACT REPORT UNLOCKING SUSTAINABLE OPPORTUNITIES

Sustainability Impacts at a Glance

RCBC helped fund projects that have made environmental and social impacts.

Php 126

billion

Eligible Green, Blue,

and Social Assets

19,072

projects

in RCBC's 2024 Sustainable Finance (SF) Portfolio

53%

of SF portfolio in

renewable energy and energy efficiency projects

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2024 SUSTAINABILITY AND IMPACT REPORT

Sustainability Impacts at a Glance

UNLOCKING SUSTAINABLE OPPORTUNITIES

Contributing to the UN Sustainable Development Goals (SDGs)

RCBC's Eligible Green and Social Assets as of December 31, 2024 address 12 of the 17 UN SDGs, as follows:

RCBC Sustainable Financing Instruments

As of December 31, 2024

20,000

15,000

Php M

10,000

5,000

-

Eligible Green Eligible Social

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2024 SUSTAINABILITY AND IMPACT REPORT UNLOCKING SUSTAINABLE OPPORTUNITIES

RCBC aligns its business strategy to support the development needs of the environment and society, as articulated in the United Nations Sustainable

Development Goals (UN SDGs) and the Paris Agreement on Climate Change. RCBC institutionalizes awareness

of environmental and social (E&S) issues within the organization, with its clients, and the communities

it serves. The Bank believes sustainable practices are a key pillar of responsible lending which delivers meaningful impact on the environment and communities.

In December 2020, RCBC committed to cease funding for the construction of new coal power plants in the country or anywhere in the world, as reinforced in the RCBC Sustainability Forum conducted in October 2023. The Bank's remaining exposure to coal-fired power projects will be zeroed out by 2031.

Matters that substantively affect the organization's ability to create value over the short-, medium-and long-term:

• Adapting to evolving environment, its economic results and financial well-being;

• Ensuring the welfare of employees and investments in human capital;

• Developing innovations to respond to customer needs and circumstances; and

• Ensuring sustainability across the value chain (including lending units, suppliers and partners).

Governance

RCBC affirms its commitments to Environmental, Social, and Governance (ESG) principles as part of its Risk Governance Framework (RGF). The RGF follows a

top-down approach whereby the Board of Directors (BOD) takes ultimate accountability for the risks taken and for setting the tolerance level for these risks.

The BOD constitutes committees for decision making on various functions affecting the Bank's overall business. The Risk Oversight Committee (ROC) is the Board-level committee which provides oversight and management of risk exposures of RCBC and its subsidiaries.

Rizal Microbank (RMB) and RCBC Leasing and Finance Corporation have been implementing E&S policies which essentially adopt the principles embedded in RCBC's E&S Risk Management.

Sustainable Finance Strategy

RCBC strongly supports the BSP's call for financial institutions to be enablers of environmentally and socially responsible business decisions. The Bank has implemented its ESMS as part of its lending process since 2011, almost a decade ahead of the issuance

of BSP Circular 1085. Its Sustainable Finance Framework was developed in April 2019 - a first in the Philippine banking industry - and was updated in February 2024.

1. The ESMS Policy is a declaration of the Bank's commitment to sustainable development and management of E&S issues. It subscribes to the

   IFC Exclusion List and the IFC's eight Performance Standards. The Performance Standards of IFC,

   a shareholder of RCBC, are a global benchmark

   for identifying and managing E&S risks. A monitoring mechanism for addressing potential E&S concerns has proven to be an effective tool in engaging clients to take appropriate action, establishing a shared commitment with RCBC toward sustainable practices. Unresolved concerns over an established monitoring period, if any, are escalated to the

   ROC for proper guidance/oversight discussions.

   The ESMS Policy was updated in September 2022

   to incorporate relevant provisions under BSP Circular 1128 (ESRM Framework). This followed discussions among various teams and Senior Management before the revised Policy was approved by the ROC.

   • The ESMS Policy requires all lending relationships or credits, both pipeline and portfolio, to be vetted from an environmental and social risk perspective;

   • The ESMS assessment takes place before a lending decision is made, and continues during the life cycle of the loan agreement with the client. Through RCBC's implementation of the ESMS policy, the Bank is able to share its sustainability principles to help clients stay compliant with E&S regulations. The Bank's Risk Management Group (RMG) submits monthly ESMS updates to the ROC. E&S portfolio highlights and issues are also presented and discussed with the ROC through the monthly Chief Risk Officer (CRO) Report.

   
   
   

2. The RCBC Sustainable Finance Framework (initially published in April 2019 and updated February 2024) articulates the Bank's strategy to prioritize fundraising for specific sectors.

   Under this Framework, RCBC can issue SFIs to fund loans and projects that have clear environmental and/or social benefits. SFIs include Green Bonds, Blue Bonds, Social Bonds, Sustainability Bonds, Green Loans, Blue Loans, and other debt financing instruments which fund Eligible Green (with subset of Blue) and Social Assets. RCBC's Sustainable Finance Framework subscribes to the global bond standards8 which are continually updated to remain relevant and connected with global ESG standards.

   • RCBC's Framework obtained a Second Party Opinion (SPO) from Sustainalytics which opined that the eligible green and social projects and lending activities defined in the Framework contribute to the decreasing environmental footprint of the Philippines, advancing employment generation, and improving access to essential services of vulnerable groups in the Philippines. Under the SPO, Sustainalytics cited RCBC's Framework as "credible and impactful."

     These documents are published on RCBC's website:

     https://www.rcbc.com/ uploads/media/2024-RC-

     BC-Sustainable-Finance-Framework-1.pdf,https:// https://www.rcbc.com/ uploads/media/2024-RCBC-Sustain-able-Finance-Framework-Second-Party-Opinion.pdf

   • The Framework prescribes an Exclusionary Criteria which identify certain projects as ineligible for the use proceeds from the SFIs. Foremost of this is fossil fuel power generation, an exclusionary criterion consistent with the ASEAN Green Bond Standards and ASEAN Sustainability Bond Standards.

   • RCBC allocates the proceeds of SFIs to finance and/or refinance loans to customers or its own operating activities. RCBC's Allocation Report discloses its Eligible Sustainable Portfolio and Sustainable Funding.

The allocation report covering 2024 data underwent limited assurance procedures by RGManabat and Co. (KPMG Philippines). KPMG has confirmed that RCBC's application of funds from its sustainability bond issuances and Peso Green Time Deposits are in accordance with the Eligibility Criteria described

in its Sustainable Finance Framework.

RCBC's Sustainable Finance Framework is structured with the following key pillars:

Use of Proceeds

RCBC will allocate proceeds to finance and refinance RCBC's loans to customers in Eligible Green (and its subset of Eligible Blue) Categories and/or Eligible Social Categories.

Project Evaluation & Selection

The green (and its subset of blue) and social assets will be selected following the eligibility criteria and evaluated by the Sustainable Finance Committee.

Management of Proceeds The proceeds will be managed in a portfolio approach.

Reporting

RCBC will report on the allocation

of the net proceeds to the Eligible Green (and its subset of Eligible Blue) and Social Portfolio, and their environmental and social impact.

The allocation of the proceeds is as follows:

• Proceeds of RCBC's Green Bond or Green Loan go to Eligible Green Categories

• Proceeds of RCBC's Blue Bond or Blue Loan go to Eligible Blue Categories

• Proceeds of RCBC's Social Bond or Social Loan go to Eligible Social Categories

• Proceeds of RCBC's Sustainability Bond go to Eligible Green Categories and Eligible Social Categories

• RCBC provides disclosures on the benefits of its green and social assets through the issuance of

  the Sustainability and Impact Report, supplemented by a video which provides an effective visualization of the contribution of the Bank's lending activities

  to the environment and the society, effectively combatting climate change. Both the annual Allocation Report and the Sustainability and Impact Report are published on RCBC's website: https://www.rcbc.com/sustainability.

• In January 2024, RCBC raised USD 400 million from its five-year Sustainability Bonds issuance

  (5.9x oversubscribed, reflecting the trust in RCBC's sustainability efforts and credit outlook).

• RCBC's total sustainable portfolio consisted of around 19,072 projects as of 31 December 2024. These projects contribute to 12 of the 17 UN SDGs. Funding for renewable energy (RE) and energy efficiency projects accounted for 53% of the Bank's

total sustainable portfolio and surpassed its remaining exposure to coal-fire power projects.

8 International Capital Market Association (ICMA) Green Bond Principles 2021 (GBP), Social Bond Principles 2023 (SBP), Sustainability Bond Guidelines 2021; ASEAN Capital Markets Forum (ACMF) ASEAN Green Bond Standards 2018, ASEAN Social Bond Standards 2018, ASEAN Sustainability Bond Standards 2018; Loan Market Association (LMA), Asia Pacific Loan Market Association (APLMA) and Loan Syndications and Trading Association (LSTA) Green Loan Principles 2023 and Social Loan Principles 2023.

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2024 SUSTAINABILITY AND IMPACT REPORT

RCBC on Sustainability

UNLOCKING SUSTAINABLE OPPORTUNITIES

Eligible Green

Eligible Blue

Eligible Social

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2024 SUSTAINABILITY AND IMPACT REPORT

Stakeholders

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ENVIRONMENTAL

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2024 SUSTAINABILITY AND IMPACT REPORT

Stakeholders

SOCIAL

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Economic Impact

2024 SUSTAINABILITY AND IMPACT REPORT

Economic Impact

UNLOCKING SUSTAINABLE OPPORTUNITIES

As the country's fifth largest privately owned commercial bank, RCBC makes significant economic contributions through business revenues, employee wages and benefits, payments made to suppliers, dividends for stockholders, taxes paid to the government, its investments in local communities, as well as core industries supporting the country's sustainable economic growth, and the expansion of its banking access to the unbanked and underserved segments of society.

Economic Contributions

Value Generated and Distributed

RCBC: A Domestic Systemically Important Bank (DSIB)

As a Domestic Systemically Important Bank (DSIB), RCBC must demonstrate the capacity to maintain resilience against distress that will affect the financial system, and the economy at large. Like other DSIBs, RCBC needs to have a higher loss absorbency (HLA). The HLA requirement is attained through the Bank's Common Equity Tier 1 (CET1) which establishes a maximum degree of effective loss absorbing capacity. In the event of any breach in the HLA capital requirement, concrete and reasonable recovery plans shall be implemented as outlined in RCBC's Internal Capital Adequacy Assessment Process (ICAAP) document.

The implementation of recovery plans is aimed at improving capital position and restoring financial condition to viable levels in cases of significant deterioration under certain scenarios. As of December 31, 2024, the Bank's CET1 ratio is 13.28% (solo) and 13.53% (consolidated), both of which are above the regulatory requirement.

Business Continuity Program

RCBC has a Crisis Management Team (CMT) headed by the President and CEO. The CMT oversees the

implementation of the comprehensive Crisis Management Framework which equips the Bank in responding to

an event-led disruption in operations. The CMT's role is integral to the Bank's Business Continuity Program as it is responsible for synchronizing all measures for the Bank to contain losses and recover operations as quickly as possible.

The Bank's Business Resiliency Department under the Risk Management Group (RMG) ensures preparedness for any disaster/crisis by coordinating with all teams

in developing and maintaining a bank-wide Business Continuity Plan (BCP) and identifying critical products/ services as well as required operational support to sustain operations. The BCP identifies the necessary resources (people, processes, IT systems, and other equipment) and includes contingency procedures to guide all units on how to respond, recover, resume, and restore operations following the disaster/crisis.

The BCP complies with the BSP Circular 951 on Business Continuity and business continuity management (BCM) standards such as ISO 22301 and BS25999.9

The BIG ONE

In a joint study, the Metropolitan Manila Development Authority (MMDA), the Japan International Cooperation Agency (JICA), the Philippine Institute of Volcanology and Seismology (PHIVOLCS) looked at 18 earthquake scenarios to identify the greatest risk to Metro Manila.

Three scenarios were identified to pose the highest risk as follows:

1. 7.2-magnitude earthquake from the West Valley Fault

2. Offshore 7.9-magnitude earthquake from the Manila Trench

3. 6.5-magnitude earthquake hitting Manila Bay

   The first scenario, popularly known as the "Big One", is predicted to traverse a 100-kilometer fault that runs

   through six cities in Metro Manila and nearby provinces. Should this scenario happen, it could result in a disaster of never-before-seen proportions.

   The scenario is characterized by at least the following events:

   • The collapse of 170,000 residential houses and

     the death of about 34,000 people. Another 114,000 individuals will be injured while 340,000 houses will be partly damaged.

   • At least seven bridges will fall, while 10% of public buildings will be heavily damaged.

   • The 4,615 kilometers of water distribution pipes will suffer 4,000 points of breakage.

   • Thirty kilometers' worth of electric cables will be cut and 95 kilometers of communication cables will be disconnected. Cellular phone service will be congested and out of use.

   • Several fires will originate from factories, hospitals and kitchens. The scenario, which is assumed to occur at nighttime, predicts the fires will burn 1,710 hectares of land, claiming 18,000 lives.

   • Ambulances will be unable to get through the streets and bodies will be lined along the road. The scenario is reminiscent of the horrors of Super Typhoon Yolanda.

   • The destruction, together with the losses that the economy will suffer, will constitute a national crisis.

As a preparation for the BIG ONE, the Bank officially inaugurated the Angeles Alternate Site (Angeles City, Pampanga) in 4Q2023. This alternate site is strategically and safely situated in the north, away from the west valley fault. It will serve as the Bank's and subsidiaries' back-up for its critical functions in case the primary office in the National Capital Region (NCR) becomes inaccessible or unsafe.

Disaster Preparedness: RCBC Response to Natural Calamities and Cyber Attacks

RCBC Senior Management has always been on top of disaster preparedness and response to natural, man-made, technological and pandemic threats and events. Comprehensive Disaster Recovery Plan,

Crisis Management Plan and Institutional BCP are in place and readily available upon activation. BCP Teams and BCP Leaders are equipped with all the

training and preparation strategies for any contingency. Alternate sites, Data Center back-up site outside of Metro Manila, IT redundancy infrastructure, Buddy Branch system and contingency procedures are annually tested to ensure that infrastructure and

BCP Teams execute the plans and validate efficiency and effectiveness in preparation for any threat of cyber incident or disaster occurrence.

Incorporating Environmental and Social (E&S) risk

in the Bank's BCP and disaster preparation helps the institution to formulate effective strategies to address its impacts.

The Bank has created a risk assessment tool that meticulously tracks the vulnerabilities of its employees, its assets as well as clients from escalating threats posed by climate-related disasters. This data-driven disaster risk dashboard serves as a centralized platform for visualizing, analyzing, and responding to disaster risks using up-to-date and historical data.

The risk assessment tool mitigates the impacts of climate change by monitoring key locations and assets in

high-risk areas. The disaster risk dashboard tracks the vulnerabilities of employees and various premises and offices across the country. This initiative allows the Bank to preemptively position its disaster recovery and

emergency response teams in areas most susceptible to risks such as flooding, earthquakes, and volcanic activity.

Applications of the Dashboard

1. Emergency Preparedness: Helps planners identify high-risk areas and develop contingency plans

2. Disaster Response: Facilitates coordination among responders

   by providing real-time updates and resource tracking

3. Recovery and Resilience Building: Supports long-term recovery by analyzing post-disaster impacts and identifying opportunities to reduce future risks. Tabletop exercises on E&S risks have been conducted annually to gauge the BCP teams' knowledge, awareness and capacity in effectively managing an E&S incident. For 2024, the scenario focused on La Niña weather pattern, where the country had its fair share of super typhoons and tropical cyclones including the extraordinary six (6) typhoons that affected the country within 30 days. During late October to mid-November, six (6) tropical cyclones entered the Philippines Area of Responsibility (PAR) with varying strengths from Severe Tropical Storm to Super Typhoons, with heavy to intense rainfall or strong to severe winds.

The tabletop activity prepares the Business Units

to effectively manage extreme weather events with disruptions such as super typhoons. Participating in the exercise were selected BCP Leaders, Support Groups and Management Teams who are the drivers of business continuity and crisis management.

There were no major natural or technological catastrophes in 2024 that triggered a crisis management plan.

However, awareness training, tabletop exercises, and BCP testing are conducted annually to equip key people and responders on the updated guidelines and Bank strategies. Daily news alerts on weather forecast and volcanic movements are sent out to employees and subsidiaries twice during working days. The reports give an overview of bulletins published by reputable sources such as Philippine Atmospheric, Geophysical and Astronomical Services Administration (PAGASA) and PHILVOCS, respectively.

Emergency go bags and survival kits are available at each employee's workstation and offices. Earthquake and fire drills were conducted in all Bank premises nationwide to further train all employees to quickly respond during these emergencies. Crisis communication via call tree system is performed every after a super typhoon or earthquake event to account employees and extend further help and quick assistance as necessary. A mandatory E-learning on business continuity and disaster preparedness is in place for all employees (from senior management to rank and file).

9 ISO 22301 is the international standard for business continuity management, and builds on the success of British Standard BS 25999 and other regional standards. It is designed to protect business from potential disruption, which includes extreme weather, fire, flood, natural disaster, theft, IT outage, staff illness or terrorist attack. BS25999, the world's first British standard for BCM, has been developed to help minimize the risk of such disruptions.

24 25

2024 SUSTAINABILITY AND IMPACT REPORT

Economic Impact

UNLOCKING SUSTAINABLE OPPORTUNITIES

Continuing Support for

Financial Inclusion and Digitalization

Digital Products and Services

RCBC Digital Enterprise and Innovation Group (DEIG)

In delivering innovative digital solutions, RCBC remains a strong pillar of sustainable financial development in the Philippines. Pulz, ATM Go, and DiskarTech consistently provide essential financial services to underserved and unbanked Filipinos in remote and rural areas, as well

as in overseas communities. RCBC's success as a leading sustainable financial institution stems from the

DEIG's commitment to customer-centric innovation and excellence anchored upon social purpose.

RCBC Pulz

RCBC Pulz is an all-in-one banking app that ensures a convenient, effortless banking experience. One of its

standout features is its strong focus on security, utilizing advanced technology and multiple security checks

for safe financial transactions. With its user-friendly and secure platform, RCBC Pulz also allows customers to open an account anytime, anywhere, without a minimum balance requirement. Filipinos worldwide

26

can also create their bank accounts through RCBC Pulz using any international mobile number, further promoting financial inclusivity.

RCBC Pulz continues to redefine customer experience while addressing the evolving demands of modern banking. The app delivers innovative and seamless user interactions by leveraging established and emerging technologies. It offers state-of-the-art digital services, including AI-powered cross-selling and upselling tools to enhance customer lifecycle value.

The app's extensive features include QR code-based deposits and withdrawals, check deposits via photo capture, and seamless local and international fund transfers. RCBC Pulz also enables users to pay bills, convert purchases into installments, reload telco SIMs and wallets, make toll payments, and engage in

real-time foreign exchange transactions across six currencies. It also provides a dedicated financial literacy section and houses the country's first in-app digital

Unit Investment Trust Fund (UITF) management feature.

In 2024, RCBC collaborated with the Department of Migrant Workers (DMW) to promote digital and

financial literacy to Overseas Filipino Workers (OFWs) with #OFWsGoDigital: RCBC Financial Education Campaign for OFWs.

RCBC ATM Go

RCBC ATM Go is the Philippines' first and most extensive network of grassroots-based and bank-agnostic ATM terminals. Strategically located in accessible community hubs such as public markets, transport terminals, and shopping centers, ATM Go terminals offer cash deposits, cardless withdrawals, international card withdrawals, bank transfers, mobile loading, remittances, and bill payments. Through partnerships with local merchants, grassroots enterprises, and organizations, RCBC continuously extends its reach to a broader population segment and enhances financial accessibility nationwide. ATM Go covers 100% of provinces, 100% of cities, and 93% of municipalities, enhancing access to banking services and providing entrepreneurial opportunities in rural and remote communities.

This digital solution remains a vital component of the government's welfare programs, sustaining its impact even in the post-pandemic era, with over 65% of its financial transactions allocated to social grants and cash withdrawals for beneficiaries of the Pantawid Pamilyang Pilipino Program (4Ps).

RCBC DiskarTech

RCBC DiskarTech is the world's first multilingual financial inclusion super app, designed to make banking accessible to a broad range of Filipinos. Originally designed to support marginalized groups, including Indigenous communities in remote areas, the app has since expanded to serve a broader market. Available in Tagalog-English (Taglish) and Cebuano, DiskarTech offers various financial services, including digital savings with a competitive 4.88% interest rate, fund transfers, mobile loads, telemedicine, insurance, and loans.

DiskarTech promotes financial inclusion by addressing the needs of underserved communities, particularly in geographically disadvantaged areas. By eliminating common banking barriers such as initial deposits, maintaining balances, and dormancy fees, the app provides an accessible entry point for financial security. Its seamless end-to-end user experience empowers individuals to save, manage their money, and easily access essential financial services.

RCBC is in the initial rollout stage of Pasado Loans,

a new 24/7 loan product designed to provide accessible financial assistance without requiring collateral.

Powered by a digital decision engine, the loan aims

to streamline credit assessment and expand borrowing opportunities for Filipinos who may struggle with traditional financial services-loan amounts range from Php 30,000 to Php 500,000. The soft launch in late 2024 is being reviewed, with the team refining parameters before a broader rollout

RCBC Business Banking Group (BBG)

RCBC Boz

In November 2023, RCBC launched RCBC Boz designed for microentrepreneurs to manage budgets, invoices and employee payrolls. The app offers reports generation which could seamlessly grow businesses. The platform also has facilities and e-learnings to provide financial education capacity to the users.

A video series known as "RCBC Boz Sessions" was rolled out in 2024 to showcase the experiences of Filipino entrepreneurs in starting and growing their businesses, and how such journey has been made easier by the RCBC Boz app.

RCBC Credit Cards

In 2024, RCBC Credit Cards implemented straight-through processing (STP) in credit card applications for specific segments through its Digital Onboarding platform. This technology-driven solution automates the end-to-end application, approval, and card creation process, significantly reducing reliance on manual interventions. The platform allows customers to explore and select from a variety

of card products tailored to fit their unique needs and lifestyle preferences.

By digitizing processes, customer experience is improved through instant decisioning and reduced use of resources and manpower.

27

2024 SUSTAINABILITY AND IMPACT REPORT

Economic Impact

UNLOCKING SUSTAINABLE OPPORTUNITIES

Strengthened Resilience against Cyber Threats and Fraud

RCBC prioritizes customer security by equipping its digital banking application with robust features such as two-factor authentication, biometric support, and real-time transaction notifications.

In addition, the Bank launched the #DontGetFooled cyber security awareness campaign in August 2022 to educate customers about various scams through online platforms, webinars, and media channels. This ongoing campaign aims to enhance customer awareness and promote heightened vigilance against fraudulent transactions, both online and offline.

In support of BSP regulations (BSP Memorandum No. M-2022-015 and BSP Circular 1140) and to further strengthen its security measures, RCBC and RCBC Credit Cards have removed all clickable links from

customer communications (emails or electronic direct mailers, SMS, and Viber). This proactive approach has been recognized with the "Excellence in Fraud Awareness and Education Programme" award at the 2023 Regulation Asia Awards. The Bank is also fully prepared to comply with the Anti-Financial Account Scamming Act (AFASA), or Republic Act No. 12010 to protect customers from the growing threats of financial scams and cybercrimes.

In 2023, RCBC entered into an agreement with Globe Telecom, a leading telecommunications services provider in the Philippines. This networking strategy signifies the commitment of both parties to work together against online fraud, aiming to enhance joint capability to investigate and respond to financial scams and

fraud, establish proactive measures, and promote a more integrated and collaborative approach to information and intelligence sharing against social and governance risks.

During the fourth quarter of 2024, RCBC Credit Cards and Mastercard partnered to launch a Safety & Security Educational Campaign on social media platforms.

The campaign aimed to raise awareness on fraud tactics and to educate cardholders on how to proactively protect their accounts and avoid becoming victims of cybercriminals. It reached over two million people on Facebook and received active engagement from the RCBC Credit Card holders.

RCBC's management of digital risks is characterized by advanced and sophisticated cyber-security tools and programs. The Bank's Information Technology and Fraud Risk Management System work together to ensure that the Bank's security systems are robust and that the protection of RCBC's account holders is constantly upheld. In June 2022, RCBC and its technology partner GBG, were recognized as the Best Fraud Technology

(PNP-ACG) to have a direct communication channel

for efficient reporting of fraudulent activities for immediate investigation, blocking, and possible return of funds.

This signifies the Bank's commitment to work together against fraud.

The Bank acknowledges that a holistic approach is needed to address these threats. In addition to technological solutions, the management of RCBC regularly receives cybersecurity reports that provide valuable insights into its cybersecurity posture. RCBC routinely engages third parties to perform independent assessments of its IT infrastructure and applications.

To address the human aspect of cybersecurity, regular training and advisories are provided to employees.

Sustainable Finance

RCBC remains at the forefront of sustainability in the banking industry in support of the Philippines' drive for action against climate change. These are supported by the Bank's Environmental and Social Management System (ESMS) Policy which requires the vetting of all lending relationships from an E&S perspective, and the Sustainable Finance Framework which articulates the Bank's funding strategy to prioritize sectors that have clear E&S benefits, foremost of which is clean energy. Both initiatives fall under the Charter of the Bank's Risk Oversight Committee (ROC), a Board-level Committee, which is responsible for the integration of sustainability principles into the risk governance/risk management frameworks of RCBC.

The ESMS Policy and Sustainable Finance Framework adhere to respective Exclusionary Criteria such as that of the International Finance Corporation (IFC) Exclusion List and global bond standards guidelines. The ESMS Policy embodies RCBC's commitment to cease funding of new coal power plants. The Bank's coal exposure is expected to taper off to zero by 2031.

RCBC actively pursues fundraising and lending towards priority sectors which have clear E&S benefits, as laid out in the Sustainable Finance Framework. In January 2024, the Bank raised USD 400 million in sustainability notes, drawing strong support from global investors and reflecting a positive outlook and confidence

in its implementation.

RCBC has also taken the initiative to amend its Sustainable Finance Framework in February 2024 (initially issued in April 2019) to reflect updates in market best practices and in the governing principles of the International Capital Market Association (ICMA), the Loan Market Association (LMA) along with the incorporation of

"blue financing" as a subset of eligible green projects.

A Second Party Opinion (SPO) was issued by Sustainalytics

In the WWF's Sustainable Banking Assessment (SUSBA) 2024 (published in January 2025)11, RCBC continues to outperform other Philippine banks in meeting the most SUSBA indicators through the quality of its disclosures. This further illustrates RCBC's commitment to transparency and leadership in sustainable finance vis-a-vis its peers in the banking industry.

Through identified interoperability with its ESMS and Sustainable Finance Framework, starting December 2024, RCBC has initiated support for BSP Circular 1187 (Philippine Sustainable Finance Taxonomy Guidelines or SFTG) by expanding its assessment of sustainable value chains directed toward climate change mitigation and climate

change adaptation. RCBC's Chief Sustainability Officer (CSO) and representatives attended workshops and consultative discussions to understand the SFTG. Internal learning sessions with the Bank's lending units have also been conducted and considered as a continuing activity.

RCBC Allocation Report December 31, 2024

ELIGIBLE SUSTAINABLE PORTFOLIO

SUSTAINABLE FUNDING

Percentage of Eligible Sustainable Portfolio Allocated (Usage) 21%

Implementation under the Risk Technology Implementation Award of the Asian Banker. This attests to the reliability and soundness of RCBC's fraud risk management system, which is equipped with real-time monitoring capability to detect fraudulent transactions

affirming the credibility and impact of the framework. Both the revised framework and the SPO are available on the RCBC website10.

Based on the updated end-2024 figures, RCBC has

Percentage of Net Proceeds of Sustainable Funding Allocated to Eligible Sustainable Portfolio

Buffer

100%

and automate counter measures 24/7 from the Bank's digital channels. RCBC has also partnered with other financial institutions, telecommunication companies and government agencies such as Cybercrime Investigation and Coordinating Center (CICC) and Philippine National Police - Anti-Cybercrime Group

financed around 19,000 projects under its eligible green (with a subset of blue) and eligible social portfolio amounting to over Php 120 billion.

Eligible Green Portfolio 65,973 79%

Eligible Social Portfolio 33,512 78%

Total Eligible Sustainable Portfolio 99,485 79%

10 RCBC. Sustainability. https://www.rcbc.com/sustainability.

28

11 WWF-Singapore - World Wide Fund for Nature (Singapore) Limited. Sustainable Banking Assessment 2024.

https://www.wwf.sg/susba/wp-content/uploads/sites/5/2024/12/SUSTAINABLE-BANKING-ASSESSMENT-2024.pdf

29

2024 SUSTAINABILITY AND IMPACT REPORT

Economic Impact

RCBC Sustainable Portfolio Size and Distribution

Opportunities

UNLOCKING SUSTAINABLE OPPORTUNITIES

As of December 31, 2024

Renewable energy continues to dominate the portfolio, comprising 42% of the total sustainable portfolio and surpassing the Bank's remaining exposure to coal power generation projects.

Sustainable Portfolio Projects As of December 31, 2024

1%

The national government has been urging the private sector to pursue digital innovations and human capital development for the economy to fully recover from the pandemic. The government's call is aligned with RCBC's goal to be a leading financial institution in the field of digital and sustainable finance. RCBC continues to provide products and services which support the government's call to action in the areas of digital transformation, responsible lending and capacity building, and sustainable value chains, among others.

Updates on Digital Products and Services

Financial Inclusion Initiatives

5%

ACCESS TO ESSENTIAL SERVICES

4%

9%

SOCIOECONOMIC ADVANCEMENT

OTHER ELIGIBLE GREEN & SOCIAL

RCBC Pulz

Customers can easily perform various banking tasks, such as depositing or withdrawing money using QR codes, depositing local checks just by taking a photo, and directly transferring funds locally or abroad, with the trailblazing digital concierge service.

EMPLOYMENT GENERATION

16%

AFFORDABLE HOUSING

AND EMPOWERMENT

42%

RENEWABLE ENERGY

Customers can pay bills, convert purchases into installments, load up their telco SIM and gaming wallets, make toll payments effortlessly, buy and sell of up to six foreign currencies in real time such as US Dollars, Hong Kong Dollars, Euro, British Pounds, Japanese Yen, and Singapore Dollars. The app also has a dedicated section for financial literacy information and on top of it all, Filipinos can now manage or place new investments through the country's first digital, in-app unit investment trust fund or UITF.

GREEN 7

5%

BUILDINGS %

12%

48% Surge

in transaction volume

46% Increase

in transaction value

CLEAN TRANSPORTATION

ENERGY EFFICIENCY

33% Growth

in primary enrollment

31% Leap

in new-to-bank retail

Renewable Energy Portfolio Projects

25

1

1

14

10

1

10

11

11

22

2

3

20

1

15

1

1

3

3

1

2

1

1

2

3

16

10

62% Increase

in InstaPay transaction volume

25% Increase

increase in PESONet transaction volume

40% Increase

in InstaPay transaction value

33% Increase

increase in PESONet transaction value

5

4

6

6

1

7

8

5

0

2019

2020 2021 2022 2023 2024

Solar PV Wind Hydropower Geothermal

30 31

2024 SUSTAINABILITY AND IMPACT REPORT

Economic Impact

RCBC ATM Go

ATM Go extends its digital financial services to areas that need them the most, like Lake Sebu in South Cotabato,

Busuanga and Cullon in Palawan, and Turtle Island, Tawi-Tawi - the southwestern tip of the Philippines and

a brief 30-minute boat ride from Sabah, Malaysia. RCBC focuses on the Geographically Isolated and Disadvantaged Areas (GIDAs).

RCBC's partnerships also revolve around digital literacy and financial awareness. Through its partnership with the Department of Social Welfare and Development (DSWD) nationwide, RCBC has launched financial literacy webinars and modules that equip Filipinos with digital and financial aptitude to use financial products and digital services such as RCBC ATM Go and RCBC Diskartech for their benefit.

UNLOCKING SUSTAINABLE OPPORTUNITIES

Innovations and Partnerships on Financial Inclusion

Access Payroll Program

This is a revolutionary financial inclusion program which fosters a culture of shared financial growth for both the company and its employees. It aims to improve the overall payroll experience through quality solutions, not only for RCBC, but most especially for underserved employees, ensuring access to financial literacy workshops, savings options, life and property protection, loan facilities, investments and other essential financial benefits.

17% Leap

leap in transaction volume

13% Increase

in new terminals

30% Jump

in transaction value

46% Increase

in year-end terminals

Kabalikat Cooperative Program

This is a transformative initiative aimed at fostering financial inclusion and empowering cooperatives to create sustainable growth. The program also opens opportunities

for cooperatives to generate additional revenue streams.

Public Utility Vehicle (PUV) Modernization Program

RCBC stands out as one of the few commercial banks in the country that actively supports the government's Public Utility Vehicle (PUV) Modernization Program. By providing

specialized financing solutions to transport cooperatives

145% Growth

6-Year CAGR

When their members avail of featured bank products and services, cooperatives can earn commissions, creating a

and drivers, RCBC demonstrates its commitment to, not only advancing sustainable transportation, but also

in ATM Go merchants

of ATM Go

• 80% gross transaction value

• 81% volume

sustainable source of income for their operations. These offerings include Auto Loans, RCBC Credit Cards, ATM Go, Sunlife Grepa and Malayan Insurance.

promoting financial inclusion for underserved sectors. This unique initiative reflects RCBC's leadership in bridging the gap between public service modernization and inclusive economic growth.

RCBC DiskarTech

RCBC continued its expansion drive by partnering with like-minded organizations in the digital finance industry. These partnerships include MLhuillier, which will enable RCBC to penetrate communities and provide them with RCBC ATM Go services, and PeraHub and Remitly, which will enable Filipinos to receive remittances through RCBC DiskarTech.

RCBC also partnered with Bayad Center, which expands the number

of billers that RCBC DiskarTech users can engage with; and Express Pay and DragonPay to ease e-commerce transactions of RCBC users and encourage them to embrace digital shopping and banking.

13% Increase

in total transaction volume

13% Increase

in DiskarTech Basic Deposit

Accounts (BDA) deposits

41.37%

Increase

Financial Access for Overseas Filipinos

Through a Memorandum of Understanding (MOU), RCBC partnered with the Commission on Filipinos Overseas (CFO) to deliver digital finance literacy and services to Filipinos worldwide. RCBC Chairperson Helen Yuchengco-Dee and President and CEO Eugene Acevedo attended the MOU signing in February 2025.

Promotion of Fair Trade Practices

Timbangan ng Bayan is a government initiative in partnership with RCBC that helps support the government's efforts against unfair trade practices by empowering customers to verify the weight of their purchases in public markets. The initiative, in partnership with the Department of Trade and Industry (DTI), the Department of Science and Technology (DOST), and the Department of Interior and Local Government (DILG), was launched in various municipalities.

22.25% Growth

in bill payment volume

86.03% Surge

in bill payment gross transaction value

in transaction volume of InstaPay incoming transactions

40.60% Increase

increase in transaction value of InstaPay incoming transactions

Boosting Financial Inclusion in the Bangsamoro Autonomous Region in Muslim Mindanao (BARMM)

RCBC signed a landmark agreement with the Ministry of Social Services and Development (MSSD) to expand digital literacy and deliver digital financing solutions to the region.

32 33

2024 SUSTAINABILITY AND IMPACT REPORT

Economic Impact

Responsible Lending,

Capacity-Building, and Embedding

been realized due to lower postage and printing costs. These applies to the following implemented activities:

UNLOCKING SUSTAINABLE OPPORTUNITIES

are communicated to the internal stakeholders.

Financial Intermediation

At least four ESMS trainings are conducted per year

Sustainability in RCBC

• Financing Renewable Energy (RE) Projects. RCBC has continually supported funding for RE projects, which continue to dominate the Bank's eligible sustainable portfolio. As approved by the

  Bank's ROC in March 2023, RCBC targeted to increase its RE portfolio by 10% to 15% per annum (p.a.) for the succeeding 12 to 24 months. The Bank was able to surpass this target through actual year-on-year RE portfolio growth of over 80% as of December 2024.

  RCBC ended 2024 with a power generation loan portfolio dominated by financing for RE. Its RE portfolio accounted for approximately 6.8% of its total loan portfolio, surpassing the Bank's remaining exposure to coal power generation projects.

• Driving Sustainable Mobility. RCBC became one of Tesla's preferred financing partners in the country following the electric vehicle manufacturer's entry into the local market in 2024. The Bank is rolling out digital auto loan application processes, offering solutions for RCBC customers who want to experience Tesla's vision of sustainable mobility.

• Harnessing Renewable Energy. The Bank's headquarters

  - the RCBC Plaza in Makati City and the AT Yuchengco Centre (ATYC) in Taguig City - started being powered by RE sources from AC Energy in August 2024 and September 2024, respectively.

• Walking the Talk. Starting 2022, RCBC has integrated a mandatory Sustainability Key Result Area (KRA) as part of the performance evaluation of its employees, as advocated by BSP Circulars 1085 and 1128.

  The objective is to promote E&S responsibility among employees, with the internally developed Sustainability e-learning materials and infographics used as primary tools in applying the new performance metric. These materials are made accessible to all RCBC associates, from rank-and-file employees up to the Board of Directors.

• Raising Awareness. In 2024, the Bank's Sustainable Finance Division started to develop a regular consolidation of sustainability-related news,

  with a dedicated portion on RCBC initiatives.

  These electronically circulated newsletters have been shared internally and will be cascaded Bank-wide in 2025 to promote understanding of sustainable finance developments within the organization and in the industry.

• Going Paperless. RCBC shifted from paper-based correspondences to e-mail notifications to significantly lower its paper consumption and waste along with less energy use in the transport and delivery of paper-based correspondences. Savings have also

  • Cessation of sending paper-based Time Deposit Statement of Accounts

  • Reduction of paper usage by shifting paper-based notifications via registered mail to email notifications for various account correspondences

• Deepening Understanding. The Bank sustained its capacity-building programs for the benefit of its clients and employees through the following sustainability knowledge-sharing events in 2024:

  • Financial Literacy (FinLit) Program: Started in 2023 as a collaboration between RCBC and the Sumitomo Mitsui Banking Corp (SMBC) Group,

    this program facilitated by select branch sales staff initially focused on payroll employees in various ecozone regions. As of October 2024, a total of

    392 sessions were conducted, empowering 15,246 attendees. The FinLit Program was among the top 7 recipients of the SMBC Group Shaka-kachi Award, the SMBC Group's recognition of programs creating social values.

  • Participation in Sustainability Forums: In August 2024, RCBC's CSO served as one of the panelists in the SME Forum arranged by the Financial Executives Institute of the Philippines (FINEX),

    aimed at educating SMEs and financial institutions on various ways for financing through sustainable finance. RCBC's CSO also attended the Asian Business Changemakers Conference held in

    Hong Kong and organized by the Centre for Asian Philanthropy and Society in May 2024. The Conference gathered over 20 sustainability executives across the region to hold discussions

    and exchange views on the evolution of responsible business in Asia. In early 2025, RCBC's CSO was one of the speakers in the capacity building programs of the BSP, furthering the regulator's sustainable finance initiatives.

• Strengthening Client Relationships in Sustainability. Starting April 2025, RCBC Hexagon Club members are given the opportunity to support the Haribon Foundation for the Conservation of Natural Resources Inc. (HARIBON) through direct donations or by using their credit card points. This follows the signing

  of a Memorandum of Agreement between RCBC and HARIBON on March 25, 2025, marking RCBC's initial foray in connecting with its clients through

  the unique customer experience of championing the biodiversity conservation and social advocacies

  of HARIBON. By engaging the Hexagon Club community, RCBC and the Hexagon Club members will be able to help spread awareness

  about the urgent need in protecting the environment through shared campaigns, learning sessions,

  and engagement activities for various stakeholders.

  RCBC has been implementing its Environmental and Social Management System (ESMS) since 2011 and its own Sustainable Finance Framework since April 2019.

  The Bank's ESMS requires that all lending relationships/ credits, both pipeline and portfolio, are vetted from

  an E&S risk perspective. The ESMS is implemented to safeguard lending operations from exposure to

  activities with identified E&S risks. E&S risk mitigation in the Bank's loan portfolio continues to be handled by the ESMS function which provides oversight on the implementation of RCBC's ESMS Policy.

  The ESMS Policy goes through a comprehensive review process on a regular basis to ensure its alignment

  with relevant BSP Circulars and E&S regulations. Policy updates were implemented in September 2022 to primarily incorporate certain requirements of BSP Circular 1128.

  Certain ESMS Policy tools were recalibrated in 2024 given their interoperability with the SFTG assessment which expands the assessment through the identification

  of sustainable value chains directed toward climate change mitigation and climate change adaptation. The ESMS Policy is published on the Bank's Online Library and is accessible to all employees.

  In accordance with the ESMS Policy, all credit proposals are screened using the applicable requirements -

  the IFC Exclusion List (for environmentally and

  socially sensitive sectors), relevant national (DENR-EMB guidelines) and international laws / IFC Performance Standards on environment, biodiversity, deforestation, marine environment, water risk (Philippine Clean Water Act), pollution prevention (Philippine Clean Air Act), indigenous peoples (The Indigenous Peoples Rights Act), protection of cultural heritage, health, human and labor rights, safety and social issues, and any standards established therein. Environmental Risk Categories (ERCs) are assigned to accounts, and credit approvals obtained in accordance with requirements depending on the confirmed ERC.

  Based on the initial assessment of relationship managers (first line of defense), an account is risk-classified as ERC A (high), B (medium), or C (low) in consideration of the type and scale of potential impacts of the respective account's operations. The ERC classification is validated or confirmed by the ESRO, the second line of defense, who has the authority to override first line E&S risk assessment, if warranted. Validated ERC assessments are eventually included in the regular review of Internal Audit (third line of defense). The ERC assessment takes place before a lending decision is made and continues during the life cycle of the loan agreement with the client. Applicable environmental covenants are also incorporated in the loan/credit agreement, and

  these are periodically evaluated and monitored to ensure compliance.

  To ensure faithful compliance with the ESMS Policy, the Bank has ESROs equipped with the expertise to conduct appropriate E&S review and assessments.

  The ESRO function is part of RCBC Sustainable Finance Division12 (headed by the CSO) that oversees

  the effective implementation of the ESMS Policy. The ESROs conduct learning sessions on the ESMS Policy implementation to ensure that the updates

  for the Bank's relationship managers.

  The ESMS Policy subscribes to IFC's 8 Performance Standards, as follows, to benchmark projects or business activities on. These are applied in the assessment of medium- and high-risk accounts

  as measures of enhanced due diligence:

  1. Assessment and Management of Environmental and Social Risks and Impacts

  2. Labor and Working Conditions

  3. Resource Efficiency and Pollution Prevention

  4. Community Health, Safety, and Security

  5. Land Acquisition and Involuntary Resettlement

  6. Biodiversity Conservation and Sustainable Management of Living Natural Resources

  7. Indigenous Peoples

  8. Cultural Heritage

  Environmental and social due diligence (ESDD) conducted through site visits or desk reviews by the ESRO is integral to the assessment of high-risk accounts. RCBC explains the importance of the ESDD process to clients and other stakeholders and requires them to engage in activities that meet the

  Bank's sustainability standards. By means of RCBC's follow-through ESDD with its clients (18-24-month cycle), the Bank can validate the closure of previous ESDD findings by the next cycle of RCBC's evaluation, hence providing a proper monitoring mechanism

  for addressing potential E&S concerns. The actions taken by the clients affirm the development of

  the clients' shared commitment with RCBC toward sustainable practices.

  Transactions which may be complex or have potential E&S concerns as well as those with unresolved matters over an established monitoring period are escalated for higher level review and discussion.

  The implementation of the Bank's ESMS and the continual monitoring required under the Policy help create long-term solutions to E&S issues -mitigating negative effects on the environment

  and affected communities and enhancing sustainable development impacts.

  RCBC's sustainable portfolio is growing and continues to be ahead of the Bank's erstwhile investments

  in coal and other fossil fuel energy assets. The Bank's Eligible Sustainable Portfolio accounted for approximately 16% of total loan portfolio as of

  end-December 2024 (based on the Sustainable Finance Framework as updated in February 2024), surpassing the share of coal exposures and of ERC A accounts.

  RCBC ended 2024 with a power generation loan portfolio dominated by financing for RE. The share

  of its RE portfolio was approximately 6.8% of total loan portfolio, surpassing the Bank's remaining exposure to coal power generation projects.

  Regular monitoring and reporting of eligible green and eligible social assets through the accomplishment of the Allocation Report is undertaken by the Sustainable Finance Officers who are part of RCBC Sustainable Finance Division. Periodic Allocation Reports are submitted and presented to the ROC, the Asset

  and Liability Committee, and to the Sustainable Finance Committee. These provide regular tracking of opportunities to further asset growth and/or fundraising through SFIs.

  12 SFTG assessment is being handled by a separate team within the Sustainable Finance Division

  34 35

  
  
  

  2024 SUSTAINABILITY AND IMPACT REPORT

  Economic Impact

  
  
  

  Loan Portfolio

  
  
  

  Economic Activity	Amount (Php million)	%
  Credit Cards	110,453	16%
  Housing	98,954	14%
  Real estate, renting and other related activities	93,193	13%
  Financial intermediaries	72,473	10%
  Wholesale and retail trade	72,324	10%
  Electricity, gas and water13	69,851	10%
  Auto	62,472	9%
  Manufacturing (various industries)	47,839	7%
  Transportation and communication	47,554	7%
  Consumer14	10,090	1%
  Mining and quarrying	4,581	1%
  Agriculture, fishing, and forestry	4,075	1%
  Hotels and restaurants	3,972	-
  Other community, social and personal activities	2,461	-
  Others	10,342	1%
  Total	710,634	100%

  RCBC's concentration of credit as to industry as of December 31, 2024 is as follows:

  Procurement Practices

  RCBC supports the local economy and community. The Bank selects locally based suppliers and promotes economic inclusion when selecting suppliers. It follows a standard procurement procedure in purchasing the best resources at reasonable prices. This procedure is reviewed and revised as necessary.

  Proportion of Spending on Local Suppliers

  Disclosure (January 1 - December 31, 2024)	Quantity	Units
  Percentage of procurement spending (actual payments) used for significant locations of operations that is spent on local suppliers	86.47	%

  Business Ethics

  Training on Anti-corruption Policies and Procedures

  Disclosure (January 1 - December 31, 2024)	Quantity	Units
  Percentage of employees to whom the organization's anti- corruption policies and procedures have been communicated to	10015	%
  Percentage of business partners16 to whom the organization's anti- corruption policies and procedures have been communicated to	100	%
  Percentage of management that have received anti-corruption training	10017	%
  Training: Percentage of employees that have received anti-corruption training	100	%

  Incidents of Corruption

  UNLOCKING SUSTAINABLE OPPORTUNITIES

  RCBC strictly implements anti-corruption policies to prevent any corruption incident. The Bank conducts training and examinations to ensure that all employees (from senior management to rank and file) and those with direct contracts with RCBC are familiar and reminded of the Bank's anti-corruption policies and procedures. From the first day that an employee is hired, RCBC discusses with the employee the Bank's Code of Conduct, including the anti-corruption policies and procedures. With this, Management ensures that all employees know and understand the policies and procedures, which should be followed throughout their tenure with the institution.

  Regular corporate announcements remind employees of warning signs associated with illegal, unethical, or questionable activities/transactions. Employees are reminded to immediately report (confidentially and without risk of reprisal) any suspicious behavioral traits, warning signs, and other legitimate concerns through the whistleblowing channel of the YGC. Sanctions are imposed on erring employees. If an employee violates the company's anti-corruption policies, Management will take Legal action against them.

  Adherence to the Code of Conduct

  All employees are governed by the Bank's Code of Conduct, which revolves around the Core Values of the Bank. It is designed to serve as a guide to

  employees on how they should conduct themselves within and outside the Bank premises and in dealing with clients/customers and co-associates.

  The document is published on the Bank's website.

  Adherence to this Code is the responsibility of each and every associate. It is administered uniformly throughout the Bank and is independent of the practices of other banks. It is a condition for continuous employment.

  Any breach of this Code may result in disciplinary action ranging from reprimand to termination of employment, depending on the gravity of the offense, after the observance of due process. The Code of Conduct is divided into five parts as follows:

  1. Treatment of Clients

  2. Treatment of Bank Assets

  3. Treatment of Others

  4. Conflict of Interests

  5. Knowledge, Understanding & Compliance

  Disclosure (January 1 - December 31, 2024)	Quantity	Units
  Number of incidents in which directors were removed or disciplined for corruption	0	#
  Number of incidents in which employees were dismissed or disciplined for corruption	0	#
  Number of incidents when contracts with business partners were terminated due to incidents of corruption	0	#

  13 Around 56% are from renewable energy

  14 Includes personal and salary loans

  36

  15 Conducted via regular and compulsory e-Learning courses and examinations for all employees and those with direct contracts with RCBC

  16 In this context, the term 'business partners' includes suppliers and customers/clients.

  17 Conducted via regular and compulsory e-Learning courses and examinations for all employees and those with direct contracts with RCBC

  37

  
  
  

  2024 SUSTAINABILITY AND IMPACT REPORT

  Economic Impact

  UNLOCKING SUSTAINABLE OPPORTUNITIES

  Anti-Corruption Policies Use of Insider Information Anti-Money Laundering Act (AMLA)

  Under Part D of the Code of Conduct on Conflict of Interests, to avoid conflict of interest, employees are to conduct business transactions for the Bank in

  accordance with Bank policy and avoid direct or indirect use of the Bank's goodwill, reputation, funds and property or other resources for personal gain. This involves, among other things, accepting gifts, entertainment or favors from customers or suppliers; outside employment; outside directorship; and receiving commissions or benefits from customers or suppliers.

• Gifts and Entertainment

  The Bank does not allow solicitation of gifts, directly or indirectly, from customers or suppliers. Under no circumstance do employees accept, directly or indirectly, payments, loans, kickbacks, special privileges or services in exchange for favors.

• Favors

  The Bank does not buy business. This is obtained on the merits of the Bank's products, services and

  people. It does not bend rules nor offer money, illegal or inappropriate favors of unusual value to obtain or retain business. In this regard, any and all significant donations or contributions to or through a customer for whatever purpose using Bank property or funds should be with the prior authorization of the concerned Group Head. Should said donation

  or contribution be through the purchase of a raffle or lottery ticket, any prize or winnings therefrom, regardless of whether the ticket is in the employee's

  possession or in the employee's name, must be turned over to the Bank.

• Receiving Commissions or Benefits

Employees must avoid situations which may unduly influence the relationships with customers or suppliers in a position to transact business with the Bank.

Employees must make sure that the procedures laid down in providing customer services or in purchasing goods and services are strictly followed. Employees who have a direct hand in choosing companies from which purchases of the Bank's business requirements are to be made, are discouraged to use said authority to obtain commissions or leverage to purchase

the same item/s for personal interests at terms not otherwise available to his/her colleagues or the public. Suppliers and customers are chosen based on merit and not on what can be gained from them.

The Code of Conduct is a main topic included in the Bank's Employee Orientation Program which is held on a regular basis. The Bank provides penalties for violations of its Code of Conduct. Administrative cases

are handled in accordance with the Bank's Administrative Cases Procedure and existing laws. The Personnel Evaluation and Review Committee acts as an independent body in the evaluation and review

of cases involving dishonesty, fraud, negligence or violation of any internal Bank policy, rule or procedure committed by an RCBC employee and ensures

that the appropriate preventive, corrective and disciplinary measures are imposed on cases involving dishonesty, fraud, negligence or violation of any internal Bank policy, rule or procedure committed

by an RCBC employee.

There are laws that prohibit the use of inside information when buying, selling or trading publicly traded securities, including RCBC securities. Inside information can take many forms, but always includes information which is not available to the public and which

might influence an investor's decision to buy, sell or hold securities in a company.

Under the RCBC Code of Conduct, employees are prohibited from buying, selling or trading RCBC securities or the securities of other companies about which employees have inside information, until that information becomes public. In addition, this information should not be shared with anyone else, including family members or friends or anyone about trading in any securities based on this information.

Whistleblowing Policy

The Whistleblowing Policy is a key element in safeguarding the Bank's integrity. It aims to enhance the Bank's transparency and system for combating practices that might damage its activities and reputation. Protecting the integrity and reputation of the Bank requires the active support of its

stakeholders, particularly its employees. The following are the basic principles and system protection of the Bank's Whistleblowing Policy:

1. Employees and other stakeholders must be provided with alternative and sufficient channels for whistleblowing and communication.

   In certain instances, they must be able to bypass the main channels for whistleblowing if these prove inappropriate.

2. Employees and other stakeholders making the report in good faith should at all times be protected against reprisals.

3. The identity of the whistleblower making the report in good faith should remain confidential and anonymous.

4. Reported incidents shall be verified in an appropriate manner, and if confirmed, the Bank must take the necessary actions.

5. The rights of any person implicated in any report must be respected.

Reports of any actual or suspected criminal activities, unlawful acts or omissions, fraud, violations of the Code of Conduct and other bank policies, danger

to health and safety, improprieties or malpractice

in the workplace, including those relative to matters of financial reporting, internal control and/or auditing may be sent through the YGC Open Communication system - a confidential and anonymous reporting system for the YGC. The Bank's HRG monitors all Whistleblowing reports and shall report potential fraud cases to the Corporate Governance Committee. The Whistleblowing Policy provides that the HRG shall monitor all reported cases, and shall make a quarterly report to the Corporate Governance Committee on the number of reports received, actions taken and the latest status of each case.

The Bank's Money Laundering and Terrorist Financing Prevention Program (MLPP) is a comprehensive and risk-based policy geared toward the promotion of high ethical and professional standards and the prevention of the Bank being used, intentionally or unintentionally for money laundering and terrorist financing. The MLPP is consistent with the Anti-Money Laundering Act of 2001, as amended, The Terrorism Financing Prevention and Suppression Act of 2012, and BSP Circular No. 706, as amended. The MLPP is updated at least once every two years. This covers policies on Know Your Customer procedures, Record Keeping and Retention, Training, Risk Profiling and Covered and Suspicious Transaction Alerts Management. Central to improving the Bank's compliance with AML/ Counter-Terrorism Financing

(CFT) related regulations is the review and revision of the MLPP at least once every two years. The revised MLPP addresses the requirement outlined in new regulations and addresses changes in Bank practices considered significant as part of its on-going process of re-framing the Bank's Compliance Program.

Internal Audit

To promote and strengthen checks and balances in the Bank, RCBC promotes sound internal controls and gives due recognition to the importance of the internal audit function. On the basis of the Audit and

Compliance Committee's approved audit plans, internal audit examinations of the business units are conducted between one to three years. These examinations are based on the derived level of risk using a systematic, risk-based approach to evaluate and improve the adequacy and effectiveness of governance, risk management, control systems, and processes through

which the Board, senior management, and stockholders shall be provided with reasonable assurance that its

key organizational and procedural controls are appropriate, adequate, effective and complied with. This approach generally includes an assessment of significant risk exposures and adequacy of the risk management process, adequacy and effectiveness

of controls encompassing the organization's governance, operations, information systems, safeguarding of assets and compliance with the Bank's Code of Conduct, ethical standards, policies and documented procedures, contracts, laws, rules and regulations.

38 39

2024 SUSTAINABILITY AND IMPACT REPORT

Economic Impact

UNLOCKING SUSTAINABLE OPPORTUNITIES

Related Party Transactions (RPT)

To align with the SEC Memorandum Circular No. 10, series of 2019 or the "Rules on Material Related Party Transactions for Publicly listed Companies" issued on April 27, 2019, RCBC has updated the Bank's Policy on Related Party Transactions on September 30, 2024.

The policy defines "related party transactions" as transactions or dealings with related parties of the Bank, including its trust department, regardless of whether

or not a price is charged. These shall include, but not limited, to the following:

• On- and off-balance sheet credit exposures, claims and write-offs

• Investments and/or subscriptions for debt/equity issuances

• Consulting, professional, agency

  and other service arrangements/contracts

• Purchases and sales of assets, including transfer of technology and intangible items (e.g., research and development, trademarks and license agreements)

• Construction arrangements/contracts

• Lease arrangements/contracts

• Trading and derivative transactions

• Borrowings, commitments, fund transfers,

The RPT Management Committee reviews and approves proposed RPTs below the materiality threshold or those that do not require Board approval to ensure that said RPTs are conducted in the regular course of business and not undertaken on more favorable economic terms to such related parties than similar transactions with non-related parties under similar circumstances.

On favorable review, the RPT Management Committee approves the non-material RPT and submits the same to the Board for confirmation.

Transactions with related parties involving amounts of at least Php 10 million are considered as material RPTs. This threshold shall not apply to DOSRI loans and other credit accommodations and guarantees, and other transactions requiring Board approval under the

regulations, i.e., cross-selling, outsourcing, etc., which are always considered "material" regardless of amount. Where the amount involved in the transaction is at least 10% of the combined assets of the RCBC Group, the transaction shall be accompanied by a fairness opinion issued by an external independent party to be appointed by the Board of Directors. Excluded transactions are RPTs that, regardless of the amount involved, are exempted from vetting, approval and reporting but still subject to

1. Availments under the BSP-approved fringe benefit program

2. Transactions that do not present a real risk of potential abuse, i.e. sale of fully depreciated assets

3. Sale of bank properties (e.g., repossessed cars and real estates) to related parties done through competitive/public bidding or auction. It is emphasized that the loan component of the sale, if any, is not covered by this amendment

In case the amount involved in the transaction shall reach the SEC Material RPT threshold, the transaction

shall be subject to the vetting, approval and reporting requirements of RPTs, including the following processes:

1. The Board of Directors shall appoint an external independent party to evaluate the fairness of the terms of the material RPT. An external

   independent party may include, but is not limited to, auditing/accounting firms and third-party consultants and appraisers.

2. An Advisement Report shall be filed with the SEC within three calendar days after the execution date

   and guarantees

   • Sale, purchase or supply of any goods or materials

   • Establishment of joint venture entities

RPTs shall be interpreted broadly to include, not only transactions that are entered into with related parties, but also outstanding transactions that were entered into with an unrelated party that subsequently becomes a related party. The term "related parties" under the Bank's updated RPT Policy has been expanded in scope as it broadens the definition of "close family members" to include relatives of the Bank's Directors, Officers and Stockholders within the fourth degree of consanguinity or affinity, legitimate or common-law. Related parties also include corresponding persons in affiliated companies, those with direct or indirect linkages with the Bank, members of the Bank's Advisory Board and subsidiaries of related parties.

The Bank-constituted RPT Committee reviews material RPTs to ensure they are conducted in the regular course of business and not undertaken on more favorable economic terms (e.g., price, commissions, interest rates, fees, tenor, and collateral requirement) versus similar transactions with non-related parties under similar circumstances. On favorable review, the RPT Committee endorses material RPTs to the Board for approval.

All material RPTs shall be approved by at least two-thirds (2/3) vote of the Board of Directors, with at least a majority of the independent directors voting to approve the material RPT. In case a majority of the independent directors' vote is not secured, the material RPT may be ratified by the vote of the stockholders representing at least two-thirds (2/3) of the outstanding capital stock.

Material RPTs approved by the Board shall be submitted to the Stockholders for confirmation during the Annual Stockholders Meeting.

other RPT requirements, such as:

1. Deposit operations

2. Investment in bonds issued by the Government of the Philippines, its political subdivisions and its instrumentalities

The Bank's RPT policy shall be reviewed by the

RPT Committee and approved by the Board every three years or as necessary whenever there are any related amendments. The latest version of the Bank's RPT policy has been reviewed and approved in September 2024

to incorporate key changes on exemption of the sale

of bank properties from prior vetting and endorsement by the RPT Committee. This updates the following

list of transactions exempted from the vetting, approval and reporting requirements of RPTs provided that the amount involved in the transaction is less than the

SEC Material RPT threshold (10% of the combined assets of the RCBC Group, based on the latest audited financial statements):

1. Regular trade transactions involving purchases and sales of debt securities traded in an active market. However, subject to post-reporting to the RPT Committee

2. RPTs covered under the Trust and Investment Group's RPT Policy. (Refer to Annex C of the RPT Policy published on the Bank's website)

3. Pre-approved Treasury Transactions covered by the Policy on Related Party Transactions covering Treasury Deals

4. Credit card availments, except those with credit card lines with amounts falling under the definition of "material transactions"

of the transaction. The Advisement Report shall be signed by the Corporate Secretary.

To ensure that conflict of interest is managed, interested directors and officers shall abstain from discussion, approval and management of such transaction or matter affecting the Bank. In case they refuse to abstain, their attendance shall not be counted for purposes

of assessing the quorum and their votes shall not be counted for purposes of determining majority approval.

The Bank continues to encourage employees to communicate, confidentially and without risk of reprisal, legitimate concerns about illegal unethical or questionable RPTs. For this purpose, the Bank's Whistleblowing Policy shall apply. Reporting and investigation of abusive

RPTs shall be handled following the Bank's existing

Code of Conduct and Whistleblowing Policy. The grievance procedure under the Corporate Governance Manual shall apply to stockholders, including minority stockholders, who wish to report or express legitimate concerns on abusive RPTs.

40 41

Environmental Impact

2024 SUSTAINABILITY AND IMPACT REPORT

Environmental Impact

Environmental Contributions of the RCBC Business

RCBC continues to support the principles behind its Leadership in Energy and Environmental Design

(LEED)18 certification (RCBC Plaza in Makati is a LEED

-certified Gold-level building). Energy conservation measures are applied in the Bank's day-to-day operations.

RCBC ensures it maintains its LEED Gold certification by spending on annual LEED consultation fees to comply

with the climate adaptation requirements of the building.

The Bank's headquarters - the RCBC Plaza in Makati City and the A.T. Yuchengco Centre (ATYC)

in Taguig City - started being powered by renewable energy sources from AC Energy in August 2024

and September 2024, respectively.

RCBC instills the discipline and promotes the benefits of being mindful of sustainability practices

(e.g., environmental protection by fostering energy conservation) through the completion of the internally developed UN SDGs e-learning in 2022

and access to a UN SDG Daily Handbook in the Bank's internal Online Library beginning September 2023.

Resource Management

Energy

Efficient energy consumption is one of the underlying objectives of cost control measures. The Bank keeps

its operating expenses in check through initiatives that promote environmental responsibility and resource efficiency including switching to LED lighting systems and using energy-saving mechanisms in office elevators. As more RCBC branches open in the country, it is necessary to continue to monitor overall consumption so energy efficiency is practiced. Efficient energy consumption in RCBC's operations can translate to energy savings which, in turn, can help reduce the country's dependence on fossil fuel-based energy.

The goal of reducing global warming is embedded in RCBC's Sustainable Finance Framework which supports investments in renewable energy. This is aligned with RCBC's declaration to cease funding of the construction of new coal-fired power plants, as coal technology is known to release more greenhouse gas (GHG) per unit

of energy produced (thus increasing global warming) compared to other electricity sources. The quantitative tool (PACTA and Climate Stress Test Model) also equips RCBC with measuring transition risk associated with lending to fossil fuel power generation projects.

RCBC remains committed to action towards operational efficiency leading to conservation of energy and other energy efficient technologies. The Sustainability

e-learning material has been incorporated into the annual Bank-wide learning programs. This e-learning course is mandatory for all employees (from senior management to rank and file) and is accessible to the Board of Directors. This helps promote deeper

understanding of how energy consumption generates carbon footprint and increases GHG emissions.

The 2022 Sustainability e-learning also facilitates a global learning experience as energy consumption and other related activities are explained within the context of attaining the UN SDGs.

Water

RCBC remains committed to action towards operational efficiency including responsible water utilization and conservation. These include initiatives such as proper use of faucets and responsible consumption of drinking water.

To instill the discipline and promote the benefits of sustainability practices, RCBC in 2022 internally developed e-learning modules on the UN SDGs. All RCBC employees are required to take this online course on environmental protection which includes water conservation, among others, at a personal and at a corporate level. As a

follow-through, RCBC also offered the UN SDG Daily Handbook which can be accessed at the Bank's internal Online Library since September 2023.

Promoting responsible water consumption is also ingrained in a larger scale within RCBC's Sustainable Finance Framework which supports investments in Sustainable Water Management for clean water infrastructure, wastewater treatment, consumption, sustainable urban drainage systems, and other forms of flooding mitigation.

Materials Used by Weight or Volume

RCBC ensures that suppliers uphold sustainability standards and practices, including compliance with Philippine laws.

When entering into a new relationship with a supplier,

RCBC conducts due diligence as early as possible so that any adverse environmental impacts may

be prevented or mitigated while structuring contracts or other agreements, as well as via ongoing collaboration with suppliers.

The Bank continues to improve its existing supply chain procedure to avoid negative environmental and reputational impacts. It is able to influence suppliers

to be sustainable through the supplier accreditation processes. This influence can include changing the organization's procurement practices, adjusting performance expectations, conducting capacity building or training, introducing changes to processes, as well as terminating supplier relationships with those that are non-compliant. RCBC employs sustainability-related questionnaires in the accreditation/vetting process of vendors. The supplier's environmental performance is also observed during site visits.

The YGC Group, to which RCBC belongs, engages vendors through information campaigns on YGC's sustainability initiatives.

Ecosystems and Biodiversity

(Whether in Upland/Watershed or Coastal/Marine)

* International Union for Conservation of Nature

Adhering to the protection of ecosystems and biodiversity promotes sustainable business practices. In accordance with the Bank's ESMS Policy, all credit proposals for

loans and other credit accommodations from RCBC need to go through E&S risk and impact assessment. Only activities or projects which pass the E&S risk and impact assessment shall be eligible for financing.

The ESMS Policy adheres to the guidelines of the DENR-EMB. It also subscribes to IFC's Performance Standards which include the evaluation of the impact of a borrower's business on ecosystems and biodiversity (IFC Performance Standard 6 Biodiversity Conservation and Sustainable Management of Living Natural Resources).

RCBC's Sustainable Finance Framework supports financing for environmentally sustainable management of living natural resources and land use under its

Eligible Green Project Categories.

UNLOCKING SUSTAINABLE OPPORTUNITIES

Environmental Impact Management

As RCBC is engaged in traditional banking, it does

not generate air pollutants in its operations. The Bank's clients, however, may be generating this negative impact on the ecosystem as part of their production process. RCBC's ESMS Policy adheres to the guidelines of the DENR-EMB. It also subscribes to IFC's Performance

Standards which include the evaluation of the borrower's practices to promote resource efficiency and pollution protection (Performance Standard number 3) that may be mapped against the requirements of the Philippine Clean Air Act for pollution prevention.

Air Emissions: GHG

Air Pollutants

Solid and Hazardous Wastes

*Solid waste data pertains to the entire premise of the building not just the RCBC-occupied floors.

18 US Green Buildings Council Inc. RCBC Plaza. https://www.usgbc.org/projects/rcbc-plaza

19 This pertains to generator sets which make use of diesel.

20 Data as of reporting date for RCBC Plaza has been updated to reflect only the RCBC banking floors with direct meter measurements.

21 Water consumption data pertains to the entire premise of the building not just the RCBC-occupied floors.

22 Data provided and collated from various suppliers.

44

23 RCBC Plaza, A.T. Yuchengco Centre, and Branches; emission factor for electricity at 0.7122 kgCO2e/kWh (simple operating margin, average EF from the grid) and 0.6836 kgCO2e/kWh (combined margin for wind and solar projects) from DOE (https://www.doe.gov.ph/electric-power/2015-2017-national-grid-emission-factor-ngef); emission factor for diesel at 0.0741 tonnes CO2e/GJ from ADB (https://www. adb.org/sites/default/files/institutional- document/296466/guidelines-estimating-ghg.pdf). Please refer to footnotes under Energy Consumption.

24 Around 40% are from RCBC-occupied floors

45

2024 SUSTAINABILITY AND IMPACT REPORT

Environmental Impact

RCBC Plaza's Solid Waste Management Plan includes reducing material costs and environmental impacts, and educating and encouraging tenants to reduce, reuse, and recycle for long-term purposes to minimize ecological impacts. Solid wastes are hauled by a third party, and total amounts are recorded and tabulated.

RCBC will continue to implement initiatives aimed at operational efficiency and digitization, including waste reduction or reduced paper consumption. These include encouraging employees to apply double-sided printing on paper and lessening plastic waste.

RCBC's customer banking experience has promoted zero forms to fill out25, thus significantly reducing paper usage.

The Sustainability e-learning material has been added into the annual Bank-wide learning programs since 2021. This Sustainability e-learning course is mandatory for all employees (from senior management to rank and file) and is accessible by the BOD. This is considered instrumental in promoting deeper understanding of carbon footprint/GHG emissions and how these can be reduced through preservation of forests, proper waste segregation, and recycling of waste. In September

2023, the UN SDG Daily Handbook was made available through the Bank's intranet and cascaded to all employees via an HRG advisory, providing practical information on how to contribute to the UN SDGs through our day-to-day lives.

RCBC's support for potential financing requirements also helps promote environmental responsibility for proper waste management. The Bank's Sustainable Finance Framework includes waste management (excluding landfills), such as waste prevention, waste

Effluents

RCBC's clients may be generating effluents in their operations. In accordance with the ESMS Policy, all credit proposals for loans and other credit accommodations from RCBC need to go through E&S risk and impact assessment. Only activities or

projects which pass the E&S risk and impact assessment shall be eligible for financing.

Environmental Compliance

RCBC's ability to conform to performance standards, environmental laws, and regulations impacts the communities within the proximity of its operations, and the overall environmental welfare of society.

RCBC is committed to comply with all environmental laws and regulations, and conform to performance standards.

Non-compliance with Environmental Laws and Regulations

UNLOCKING SUSTAINABLE OPPORTUNITIES

Environmental Contributions of the RCBC Portfolio

reduction, waste recycling and material recovery with emission abatement technology under the Eligible Green Project Categories.

Hazardous Waste

RCBC does not generate hazardous waste in its operations. The Bank, however, may have an indirect impact as its clients may be generating hazardous waste harmful to the environment.

The ESMS Policy adheres to the guidelines of the DENR-EMB and subscribes to IFC's Performance Standards which include the evaluation of the borrower's practices to promote resource efficiency and pollution protection (Performance Standard 3 Resource Efficiency and Pollution Prevention).

Under Performance Standard 3, the borrower's operations are assessed in terms of compliance with environmentally sound disposal of hazardous and non-hazardous wastes.

Eligible Green Portfolio

RCBC has 30 projects in its Eligible Green Assets portfolio, amounting to Php83.3 billion as of December 31, 2024. This includes a subset of three projects under the Eligible Blue portfolio, equivalent to Php817 million. Renewable Energy projects lead the portfolio, accounting for 63%, followed by Energy Efficiency projects at 18%.

Clean Transportation had an 11% share, Green Buildings with a 7% share, while Sustainable Water Management together with Pollution Prevention and Control projects made up the remaining 1%.

Eligible Green Portfolio Distribution

0.07%

POLLUTION PREVENTION & CONTROL

SUSTAINABLE WATER MANAGEMENT

1%

ENERGY EFFICIENCY

18%

CLEAN TRANSPORTATION

11%

63%

RENEWABLE ENERGY

GREEN BUILDINGS

7%

25 Additional one form to fill out and sign if client applies for a Hexagon Club Membership (i.e. Hexagon Enrollment Form)

46 47

2024 SUSTAINABILITY AND IMPACT REPORT

Environmental Impact

Renewable Energy

UNLOCKING SUSTAINABLE OPPORTUNITIES

These are projects focused on developing the generation and the use of renewable energy (RE), including solar, wind, hydro, geothermal, and bioenergy. Eligible accounts may also refer to fuel cell and other energy storage systems for renewable energy projects/ assets and/or battery facilities that result in substantial GHG emission reductions in transport, stationary and off-grid energy storage, and other industrial application. Green hydrogen facilities such as electrolysers powered by RE, and equipment for the production and use

of hydrogen powered by RE, are also included under this category.

In 2024, the Philippines was able to add 794.34 MW of new RE to its energy capacity. This was higher than the combined 759.82 MW of RE installed from 2021 to 2023.26 According to the Independent Electricity Market Operator of the Philippines Inc. (IEMOP), the share

of RE was at 25% (in terms of GWh) in the Philippines' power generation mix as of December 2024 while the share of coal was at 58.9%.27 The Philippine Energy Plan's Clean Energy Scenario targets to increase the share of RE in the country's generation mix to 35% by 2030 and to 50% by 2040.28

RCBC supports the global movement towards the use of RE and the Philippine government's goal to grow the share of RE in the country's generation mix by deploying Php51.5 billion to help fund solar, wind, and hydro power plant projects, with a total capacity of 2,005 MW and total energy output of 1,967,672 MWh in 2024.

RCBC also helped fund geothermal power plant projects to the tune of Php1.2 billion in financing support, accounting for up to 70% of total project cost, with total generation capacity of 32 MW and total energy output of 276,444 MWh in 2024.

The Bank's support towards operational solar, wind, hydro, and geothermal power plants results in an estimated 1,157,389 tons of CO2 equivalent emissions avoided per year. As approved by its ROC in March 2023, RCBC is targeting to increase its RE portfolio by 10%

to 15% per annum in the next 12 to 24 months. It has already surpassed this target, having reached an actual RE portfolio growth of over 80% from 2023 to 2024.

Green Buildings

These are projects aimed at the construction of buildings (data centers and offices) that have achieved or are expected to achieve certifications/criteria such as LEED V4.0 or V4.1 (Gold, Platinum), Green Globes

(3 or 4 Globes), BREEAM (Excellent or Outstanding), BCA Green Mark GoldPlus or better, NABERS 4.5 stars or better, IFC's EDGE (EDGE Certified, EDGE, Advanced, Zero Carbon), Philippines BERDE Green Building Rating System (4-star and above), and data centers with a design average annual Power Usage Effectiveness (PUE) at or below 1.4.

According to the Department of Energy (DOE), there is a high demand for oil products and electricity from the commercial sector, mainly due to commercial

buildings.29 The energy consumption for the commercial sector is also expected to increase from around 14%

of Total Final Energy Consumption due to rising urbanization and the construction of new buildings in the Philippines.30

Commercial waste comprised around 27% of municipal solid wastes in the Philippines based on data from

the NSWMC Status Report, as cited in the Solid Waste Management Program Performance Audit Report 2023.31

The construction of Green Buildings is becoming more popular, as it helps to minimize the negative environmental impacts commonly associated with commercial buildings. According to Colliers, a property consultant in the Philippines, 61%

of new office supply buildings from 2025 to 2027 are expected to have green certifications.32

The Bank, through its Sustainable Finance Framework, participates in the financing of Green Buildings that have received or are expected to receive certifications or meets the criteria that recognize buildings that reduce the harmful impacts on the environment. These are also designed to promote healthy indoor premises. RCBC has helped finance Php5.9 billion for the construction and development of a Green Building project in Metro Manila which achieved a LEED Platinum certification.

This Green Building project is estimated to deliver a 37% reduction in energy consumption compared to the local baseline. It also avoids approximately 1,984 tons of CO₂ equivalent emissions and achieves a 56% reduction in water consumption. In addition, the project diverted 94% of construction waste from landfills.

26 PH push for renewable energy yields record-breaking installations. (2025, February 10). Department of Energy.

doe.gov.ph/press-releases/ph-push-renewable-energy-yields-record-breaking-installations

27 December 2024 Market Operations Highlights. (2025, January 20). Independent Electricity Market Operator of the Philippines Inc. https://www.iemop.ph/market-reports/2024-market-operations-highlights/

28 Climate and Clean Air Coalition. Philippines. https://www.ccacoalition.org/partners/philippines

48

29 National Energy Efficiency and Conservation Plan and Roadmap 2023-2050. (2023). Department of Energy Utilization Management Bureau. https://www.doe.gov.ph/sites/default/files/pdf/issuances/dc2023-05-0018-NEECP-and-Roadmap-2023-2050.pdf

30 Ibid.

31 Solid Waste Management Program Performance Audit Report. (2023). https://www.coa.gov.ph/reports/performance-audit-reports/2023-2/solid-waste-management-program/

32 Green' buildings to dominate Philippine office market until 2027 - Colliers. (2024, December 30). https://www.bworldonline.com/corporate/2024/12/30/643929/green-buildings-to-dominate-philip-pine-office-market-until-2027-colliers/

49

2024 SUSTAINABILITY AND IMPACT REPORT

Environmental Impact

UNLOCKING SUSTAINABLE OPPORTUNITIES

Clean Transportation Energy Efficiency

Eligible accounts aim to develop or manufacture low-carbon passenger, freight transportation and/or related infrastructure (subject to various criteria)

such as passenger non-public transportation, passenger public transportation, freight rail, and road freight.

These may also include projects that develop, manufacture, or recycle rechargeable batteries and fuel cell for clean transportation, and low-carbon infrastructure such as EV charging infrastructure, expansion of metro or train network and station upgrades, hydrogen fuel, and Information Communications and Technology (e.g., smart cards, smart load pricing/charging).

According to the DOE, the transport sector has contributed 35.42 million tons of carbon emissions, equivalent to 26% of the total emissions in the Philippines in 2022.33 The Philippines commits to lower the economy-wide GHG emissions by 75% from 2020 to 2030 on its Nationally Determined

Contribution (NDC). To achieve this, the GHG emissions from the transport sector will need to reach an average of 71% reduction per year.34

According to the World Bank, mass transit development is one solution to reduce the GHG emissions from

the transport sector. In its analysis, even with limited number of mass transit systems being developed during the NDC period (one Bus Rapid Transit or BRT, five urban rail lines in Metro Manila, and one BRT in Metro Cebu), the impact is estimated to be 7.3Mt of GHG emissions reduction through 2030. Another solution is the electrification of public transport fleets, estimated to contribute to a 9.63MtCO2e reduction during the NDC period.35 However, without intervention, transport emissions are expected to grow by 7.1% annually, potentially tripling to 72.6MtCO2e by 2030 compared to 23.6MtCO2e in 2010.36

RCBC helped finance passenger rail infrastructure (Php9.2 billion funding, equivalent to 16% of total project cost) with total passengers reaching 115 million over a total of 11.6 million kilometers travelled. By channeling funds to public transportation systems, the Bank helps in lowering fuel waste and CO2emissions.

These are projects that involve the development or production of products or technologies that reduce industrial energy consumption such as improved chillers, transition to fiber networks, improved lighting technology, and reduced power usage in manufacturing operations (excluding fossil fuel-based technologies).

The Philippines is actively advancing energy efficiency (EE) efforts through key initiatives such as the National Energy Efficiency and Conservation Act (EEC Act) of 2019 and the National Energy Efficiency and Conservation Plan and Roadmap37 updated in 2023. The Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy

(CREATE MORE) Act, signed into law in November 2024, also enhances incentives for EE projects, particularly through tax holidays and enhanced deductions.

Under the CREATE MORE Act38, domestic market enterprises undertaking EE projects and registered with an investment promotion agency like the Board

of Investments (BOI) can now choose between a four-to seven-year income tax holiday with a 10-year enhanced deductions regime (EDR) or a 14- to 17-year EDR, thus enhancing the commercial viability of EE investments.

With regulatory advancements in place, financing remains a critical driver in scaling energy efficiency initiatives. The Philippine Energy Efficiency Alliance (PE2)39 estimates that around USD892 billion in investments will be needed by 2040 to achieve the energy efficiency goals in Southeast Asia. During the Asia Clean Energy Summit (ACES) 2024, PE2 President Alexander Ablaza emphasized the importance of innovative financial mechanisms

in mobilizing private capital. These include sustainability bonds, blended finance, carbon transition and retirement bonds, sustainability-linked debt and green mortgages, among others.

To support the adoption of energy efficiency activities in the country, RCBC extended loans of Php14.6 billion to projects involving transition towards fiber technology to replace legacy copper technologies. Fiber technology promotes reduced energy consumption, translating to lower CO2emission and heat generation. By extending the loans, RCBC helped financed projects that reduce energy usage by 262,800 MWh per year.40

33 Key Energy Statistics. Pg 4. doe.gov.ph/sites/default/files/pdf/energy_statistics/20230725_2021-2022%20key%20energy%20stat_pocket%20size.pdf

34 The World Bank Group. (2023). https://openknowledge.worldbank.org/server/api/core/bitstreams/4cb8891e-bccf-4e79-bb9a-316873ce264e/content

35 Ibid.

36 Climate Tracker Asia. (2025, January 20). Wheels of Change: Electrifying Philippine Transport. https://climatetracker.asia/wheels-of-change-electrifying-philippine-transport

50

37 National Energy Efficiency and Conservation Plan and Roadmap 2023-2050. (2023). Department of Energy. Energy Utilization Management Bureau. https://www.doe.gov.ph/sites/default/files/pdf/

issuances/dc2023-05-0018-NEECP-and-Roadmap-2023-2050.pdf

38 Power Philippines. (2025, January 6). PE2: 2024 seen as momentous due to regulatory advancements in energy efficiency. https://powerphilippines.com/pe2-2024-seen-as-momentous-due-to-regula-tory-advancements-in-energy-efficiency/

39 Power Philippines. (2024, November 11). PE2: USD 892B needed to achieve Energy Efficiency goals in Southeast Asia. https://powerphilippines.com/pe2-usd-892b-needed-to-achieve-energy-efficiency-

goals-in-southeast-asia/

40 Studies have shown that fiber optic technology only uses 10 watts over 1 KM while coaxial cables take up to 35 watts. Source: Nexus-net. (2019, May 20). Fiber Optics: Road to an Eco-Friendly Network. https://nexus-net.info/fiber-optics-road-to-an-eco-friendly-network/

51

2024 SUSTAINABILITY AND IMPACT REPORT

Environmental Impact

UNLOCKING SUSTAINABLE OPPORTUNITIES

Pollution Prevention and Control

Eligible Blue Portfolio

Sustainable Water Management

These are projects aimed at developing or manufacturing infrastructure, transport, equipment and technology for recycling of materials, reuse of materials, and waste management (excluding landfills) such as waste prevention, waste reduction, material recovery with emission abatement technologies.

According to Department of Environment and Natural Resources (DENR) Secretary Maria Antonia Yulo Loyzaga: "The Philippines generates approximately 2.7 million metric tons of plastic waste each year. Tragically,

a significant portion of this waste finds its way into our oceans, placing our country among the top reported contributors to marine plastic pollution globally."

Taking a significant step forward to address this, the DENR launched the National Plastic Action Partnership (NPAP) Philippines in January 2025.41

NPAP is a locally driven platform that unites leaders from various sectors, including government, business, development organizations, and civil society, to tackle plastic pollution and transition to a circular economy.

A National Plastics Action Roadmap is also targeted to be completed by August 2025. The roadmap will include a baseline assessment of the plastic situation in the country, investment requirements, and a financing roadmap with a mix of blended finance incentives and innovative financing instruments.

To contribute to the country's pollution control efforts and transition to a circular economy, RCBC provided Php55 million in loans to businesses engaged in waste management, facilitating the recycling of 357 MT of plastics, and the recycling or composting of 11,357 MT of wastes.

These are projects on developing or manufacturing infrastructure, equipment, and technology for sustainable infrastructure for clean water, wastewater treatment, sustainable urban drainage systems, and other forms of flooding mitigation; increasing water-use efficiency (e.g., digital water metering, smart control center, leakage prevention and irrigation system

to promote water saving recovery), and restoring hydro-ecological systems.

SDG 6, also known as "Clean Water Sanitation," aims to ensure the availability and sustainable management of water and sanitation for all. However, growing pressures from climate change, overexploitation, and pollution have made achieving SDG 6 increasingly difficult.

Despite its urgency, the UN reported42 that, as of 2024, none of the SDG 6 targets are currently on track to be achieved by 2030. In 2022, more than 2 billion people globally still lacked access to safely managed drinking water, while over 3 billion did not have access to safely managed sanitation.

The Philippines continues to face significant challenges in this area. It ranked 92nd out of 166 countries in

the 2024 SDG Index. Its progress on SDG 6 was categorized as either stagnating or facing ongoing obstacles. According to the World Bank Group in 2023, only 48% of Filipinos had access to safely managed

or piped water services, and just 63% benefited from safely managed sanitation, including proper collection, treatment, and disposal of human waste

RCBC continues to support the country's needs

for clean and safe sources of water through its extension of Php817 million in loans to clean water and wastewater treatment infrastructure projects. In 2024, the Bank supported the supply of 17.9 million cubic meters of clean water, the treatment of 9.6 million cubic meters

of wastewater, and treatment of more than 8 million cubic meters of sewage sludge.

41 Moaje, M. (2025, January 23). Gov't launches action partnership to curb plastic pollution. https://www.pna.gov.ph/articles/1242453

52

42 Parched: 2 billion people need access to clean water, sanitation. (2024, September 26). Philippine Daily Inquirer. https://globalnation.inquirer.net/250361/parched-2-billion-people-need-access-to-clean-water-sanitation

53

2024 SUSTAINABILITY AND IMPACT REPORT

Environmental Impact

Climate-Related Risks and Opportunities

The Philippines has continuously been among the world's most vulnerable to climate change and evidently so in the past years-strong typhoons, regular flooding, and record-high temperatures surpassed year after year. While high heat indices have already been experienced in the first quarter of 2025, the Philippine Atmospheric Geophysical and Astronomical Services Administration (PAGASA) has already indicated that even higher temperatures are expected towards May with felt temperatures reaching as high as 50oC43. Shifting climate and weather patterns continue to affect various sectors such as agriculture (impact on harvest yields), education (suspension of classes for students' safety), and construction (hydration breaks to protect workers from high heat stress).

Across the world, businesses have been cognizant of their role in being part of climate solutions.

Among these corporations, over 500 financial institutions, such as banks, have actively committed and reported on their Financed greenhouse gas (GHG) emissions by being signatories to the Partnership for Carbon Accounting Financials (PCAF). PCAF provides a platform for transparency and accountability as signatories are made to commit to disclosing their financed GHG emissions within three years for becoming a signatory. The partnership also provides signatories with accreditation courses to equip the team in conducting and reporting financed emissions assessment for their portfolio.

In the Philippines, RCBC made this commitment as early as 2021 and has continually complied with the required disclosure of its Financed GHG emissions since 2023 as part of its Sustainability and Impact Reports.

As of this writing, RCBC remains to be the lone signatory in the Philippines to PCAF.

This is the third reporting of RCBC on its Financed GHG Emission calculations, following its first disclosure in

its 2022 Sustainability and Impact Report (SIR) published in May 2023, a year ahead of the three-year commitment to PCAF. As indicated in its previous SIRs, the Bank's

goal over time is to establish the appropriate baseline data for eventual target setting. To progress towards this goal, the Financed GHG Emission calculations in this report are being expanded to incorporate motor vehicle and housing loans under the Bank's consumer loans portfolio. RCBC continued to utilize the resources from PCAF to complete these expanded assessments.

Methodology

RCBC's GHG measurements remain faithful to

The Global GHG Accounting and Reporting Standard:

Part A Financed Emissions (Second Edition)44

or the PCAF Standard. The process supports the GHG Protocol Corporate Accounting and Reporting Standard on Scope 3 Category 15. For this report covering Financial Year ending 2023 (FY2023), RCBC retains

the scope in covering business loans-listed

and unlisted which includes corporate clients and small-medium enterprises.

Consistent with the PCAF Standard, RCBC uses financial control consolidation approach to account for the emissions.

The disclosure in this report has been expanded

to include calculations of Financed GHG Emissions associated with the Bank's consumer loans.

Financed emissions calculations cover the following business loans as of end FY2023:

• Corporate Banking Group (CBG) portfolio; and

• High Risk (ERC A) and Medium Risk (ERC B) accounts in the Small and Medium Enterprise Banking portfolio

  Financed emissions also covered the following consumer loans as of FY 2023:

• Motor Vehicle (Car) Loans

• Mortgage (Housing) Loans

Table 1. Key Assumptions and Coverage

RCBC follows the PCAF guidelines below on the data quality score assigned depending on the type and source of data on-hand, with 1 being the highest data quality score and 5 being the lowest data score.

UNLOCKING SUSTAINABLE OPPORTUNITIES

Table 2. PCAF Data Quality Score for Business Loans and Unlisted Equity

RCBC computed for the weighted data quality score per industry and for the business loan asset class. For this disclosure, majority of our estimated financed Scopes 1, 2 and 3 emissions received a data quality score of 4 as these were primarily derived using revenue data from our borrowers (economic activity-based).

Furthermore, the calculations for Motor Vehicle Loans and Housing Loans have consistent data quality score based on the information available to the Bank. Financed emissions from Motor Vehicle Loans received a data quality score of 3 as these were based on the vehicle efficiency and fuel type according to the known vehicle make and model, with distance traveled estimated from regional statistics data. Housing Loans received a data quality score of 4 as the estimated building energy consumptions were derived from the location-specific statistical data (based on building type) and the respective unit's floor area.

Table 3. PCAF FY2023 Results for 66% of the Total Loan Portfolio

5,000.00

4,500.00

4,000.00

3,500.00

3,000.00

2,500.00

2,000.00

1,500.00

1,000.00

500.00

-

Business Loans

Motor Vehicles

Asset Class

Mortgages

Financed Emissions (in kt CO2e)

Figure 1. RCBC Absolute Financed Emissions (Scope 1 and 2) for FY2023 across the covered Asset Classes

43 https://www.philstar.com/headlines/2025/03/11/2427462/pagasa-warns-scorching-heat-may

44 PCAF (2022). The Global GHG Accounting and Reporting Standard Part A: Financed Emissions. Second Edition.

54

45 Per the PCAF Standard, the Financed Emissions Scope 3 for all sectors is required for reports published starting 2025.

55

2024 SUSTAINABILITY AND IMPACT REPORT

Environmental Impact

UNLOCKING SUSTAINABLE OPPORTUNITIES

Table 4. RCBC's Estimated Financed Emissions (Scope 3) as of December 31, 2023 for 66% coverage of the loan portfolio

Figure 2. Business Loans: Financed Emissions per Industry (Scope 1, 2 and 3 in kt CO2e) with Outstanding Loan Balance (Php Billion) as of December 31, 2023