MANILA, Philippines -- The Bank of the Philippine Islands, one of the biggest banking channels for overseas Filipino remittances will proceed with expansion plans in the European Union despite feeling the pinch from the recent fiscal crisis in the region.

BPI will open a new branch in Italy this year and another in Spain in 2011, according to BPI president Aurelio Montinola III.

?Since we?re looking long term, the time to move is when markets are, shall we say, less buoyant,? Montinola said in a recent briefing. ?If you?re investing, it?s always good to invest when things get mixed views as the ability to have better cost is there.?

Southeast Asia?s oldest bank has hit the one-million mark in terms of overseas Filipino depositor base, accounting for a quarter of its four million total retail customer base.

It has a unit registered in England and Wales, BPI Europe Plc, which it can use as a passport to open branches in other states across Europe. To date, BPI Europe has two branches in London.

Aside from the operations in London, BPI has two remittance offices in Spain, (one each in Barcelona and Madrid) and five remittance centers in Italy (two in Milan, two in Rome and one in Turin). Some of these remittance units are being considered for upgrade into BPI Europe branches.

Asked whether BPI would break into mainland China like some of its larger Philippine peers, Montinola said this would not be part of his bank?s strategy. ?Our view is that we?re looking at where the OFWs are and our view is EU is the gateway not only for Europe but also the Middle East.?

BPI has about 10-15 overseas branches and remittance centers across Asia, Europe and the United States.

Montinola said BPI has indeed felt some ripples from the fiscal crisis in Europe in the form of lower-than-expected yields on instruments where it placed its capital.

?As you know, we put in capital in Europe and instead of earning in the order of 4 percent in investing that capital, we?re instead earning in the order of 1-2 percent,? Montinola said.

This year, Montinola said overseas Filipino remittances coursed through BPI would likely grow at par with the industry. Based on the Bangko Sentral ng Pilipinas? projection, money sent home by overseas Filipinos would expand by 8 percent this year, higher than the earlier forecast of 6 percent.

Montinola said the thrust would be to convert more remitters to depositors, noting that about 60-70 percent of BPI?s remitters now had deposit accounts with the bank.