By Luisa Maria Jacinta C. Jocson, Reporter
STATE-RUN Land Bank of the Philippines (LANDBANK) and Development Bank of the Philippines (DBP) are looking to conduct bond offerings this year to raise fresh funds, their top officials said.
LANDBANK President and Chief Executive Officer Lynette V. Ortiz said they could tap the domestic debt market by the second quarter.
“It depends, so we obviously have to see interest. At the minimum, we’re hoping we could go for P10 billion and hopefully, there will be some oversubscription for investors who really believe in the bank,” Ms. Ortiz told reporters on the sidelines of the Bangko Sentral ng Pilipinas’ annual reception for the banking community held on Friday.
“We were actually hoping it would be earlier, but I think reasonably, it would be the second quarter, just looking at all the approvals that will need to be secured.”
LANDBANK is looking to offer peso-denominated papers, Ms. Ortiz said.
“Our balance sheet is mostly a peso balance sheet and the projects — renewable, clean energy — they’re all peso-based, so we don’t want to take unnecessary FX (foreign exchange) risks,” she said.
She added that LANDBANK is looking to offer papers with a tenor of at least five years.
“That should be the sweet spot… We are trying to match it as well with the kind of projects,” Ms. Ortiz said. “If it’s solar, it can be a bit shorter. Depending on what those other projects are. Technically, we would want five to 10 years in terms of tenor.”
The official added that LANDBANK is looking into issuing sustainable bonds.
“We want to match it (projects) with bonds that are either green, blue, or sustainable, sustainability-linked. So, yes, we’re working on that, and it depends on all the approvals. We’re hoping it can be done this year.”
LANDBANK’s new charter, which is pending with Congress, would allow it to secure faster approvals for fundraising exercises, Ms. Ortiz noted. The state bank requires approvals from the Monetary Board, the National Economic and Development Authority and the Office of the President.
“The approval process for LANDBANK is a bit long. That’s in our charter. So hopefully, if we get our charter changed, we want our ability to go to market to be swifter so that all of these approvals and basically requisite steps can hopefully be shortened,” she said. “Because by the time we get all of those approvals, it’s very possible that the markets would have changed already.”
Meanwhile, the DBP said it is also eyeing to issue bonds towards the latter part of the year.
“It’s possible, maybe about P5 to P10 billion. It’s something to look at. We’re still studying it,” DBP President and Chief Executive Officer Michael O. de Jesus said separately at the same event.
The bank is also looking to issue peso bonds with a tenor of at least five years, he said.
“Just basically for liquidity purposes for our daily banking needs,” he added.
Mr. De Jesus likewise said the DBP’s proposed charter amendments will give it easier access to the capital markets.
The Finance department has pushed to amend the charters of both the LANDBANK and DBP to increase their capitalization, allow for their public listing and streamline the bond issuance process.
Proposals to revise LANDBANK’s charter are still pending at the House committee level. The LANDBANK bills seek to increase its capitalization to P1 trillion from the current P200 billion.
Meanwhile, the Senate bill seeking to amend the DBP’s charter was approved on final reading in September, while the House version is currently up for second reading.
Under the measure, the bank’s authorized capital stock will be raised to P300 billion from P35 billion.
LANDBANK saw its net profit decline by 21.07% to P25.14 billion as of end-September 2024 from P31.85 billion a year prior, based on its financial statement posted on its website.
Meanwhile, DBP booked a net profit of P4.68 billion at end-September 2024, down by 8.95% year on year.
