DBP eyes P5 billion from bond issue

MANILA, Philippines — State-run Development Bank of the Philippines (DBP) plans to raise at least P5 billion from its second issuance of peso-denominated bonds to support sustainability initiatives and development projects.

DBP president and chief executive officer Emmanuel Herbosa said the bank has returned to the onshore debt market with the offering of bonds with a tenor of two years and an interest rate of 2.5 percent.

The fund-raising activity started on Nov. 24 and will run until Dec. 4, 2020.

Herbosa said the issuance is part of the DBP’s P50-billion bond program, which is aimed at financing development projects in priority sectors.

“Even before the onset of the pandemic, we already planned to raise additional funds from our bond program to augment our funding requirements as DBP pushes to lend more to its priority sectors, especially in the wake of pandemic and the recent typhoons that have struck the country,” Herbosa said.

He said proceeds from the second issuance would be utilized for renewable energy projects, green buildings, clean transportation, energy efficiency, pollution prevention and control, and climate change adaptation projects that are in line with the DBP’s Sustainable Financing Framework.

Other development projects, including basic infrastructure and housing, employment generation, food security, and socioeconomic advancement and empowerment are also eligible.

DBP first vice president for corporate finance Francis Nicolas Chua said this fund-raising activity would further enable the bank to support projects in line with its development goals and allow DBP to reach a wider network of stakeholders, especially in the countryside.

Last year, the DBP raised P18.125 billion in sustainability bonds from the initial tranche of its P50-billion bond program. This was more than three times larger than the bank’s initial target of P5 billion.

Chua said 83 percent of the proceeds last year was allocated to 15 projects in sustainable and renewable energy, while the rest was used for water supply and health care projects.