THE DEVELOPMENT Bank of the Philippines (DBP) has raised P11 billion from its offering of dual-tenor fixed rate notes.
The bank’s offering of fixed rate Series 6A and 6B bonds was oversubscribed by five-and-a-half times compared to the initial P2-billion program, it said in a statement on Thursday.
The Series 6A bonds, which have a tenor of 1.5 years, were priced at 6.0503% per annum, while the Series 6B papers, which mature in three years, carry an annual interest rate of 6.1294%.
This marked the first time that the state-run bank issued dual-tenor bonds, DBP said
The issuance forms part of DBP’s efforts to diversify its funding sources to boost lending, it added.
“This latest bond issuance is a testament to the trust and confidence of the market in DBP as a government financial institution and allows the bank to expand its funding sources even as it ramps up its lending activities in support of the Marcos administration’s economic agenda,” DBP President and Chief Executive Officer Michael O. de Jesus said.
“The bank is committed to offer tailored solutions to meet the diverse needs of its investors while also supporting its critical development goals,” Mr. De Jesus said.
The bond issuance represents the sixth tranche of DBP’s P150-billion bond program, which is meant to finance loans to clients and support its operating activities.
The papers were enrolled and traded through the Philippine Dealing & Exchange Corp.
DBP’s net income declined by 8.95% year on year to P4.68 billion in the first nine months of 2024 amid lower foreign exchange gains.
The Finance department is pushing for amendments to the charter of DBP to increase its capitalization, allow for its public listing and streamline the bond issuance process.
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.
The capital hike will allow DBP to increase its assistance to its priority sectors, including social infrastructure and micro, small, and medium enterprises.
Mr. De Jesus last week said DBP will seek regulatory relief this year as it looks to boost its capital position.
DBP and Land Bank of the Philippines (LANDBANK) earlier asked for regulatory relief from the central bank following their contributions to the Maharlika Investment Corp. (MIC).
DBP and LANDBANK were mandated to contribute P25 billion and P50 billion, respectively, as the initial seed capital for the MIC. The state lenders remitted their contributions in September 2023.
In a recent report, the International Monetary Fund (IMF) called for the restoration of capital for the two state banks after their contributions to the Maharlika fund.
The IMF noted the importance of capital restoration and exiting regulatory relief “as soon as possible.” — A.M.C. Sy
