State-owned Development Bank of the Philippines (DBP) will launch a further P2 billion local bond offering by the fourth quarter this year, bringing the full-year bond issue target to P10.25 billion, the bank’s top official said.
DBP President and Chief Executive Officer (CEO) Michael de Jesus said they are planning to sell at least P2 billion, with a tenor of three years, of fixed-rate series bonds to increase its loanable funds.
“The bank may go out to the capital market again to raise at least another P2 billion by the end of the year,” he told Malaya Business Insight on Viber.
The planned three-year tenor and the amount of notes to be sold is still subject to funding requirements and market conditions, de Jesus added.
“(It will) depend on the market appetite and interest rates,” he also said.
DBP, the country’s fifth biggest bank out of 44, has a P150 billion bond program. The P2 billion bond issue, when sold, would be the eighth tranche of the bond program.
Last week, the bank also sold P8.25 billion worth of fresh notes. The issue was aimed at diversifying its funding sources, increasing its lending activities and finance programs for financial inclusion.
De Jesus said last week’s bond sale was 1.65-times oversubscribed from a minimum issue size of P5 billion. The P8.25 billion is broken down as: P3.457 billion worth of three-year 7A bonds offered at a 5.8751 percent annual interest rate; and the P4.793 billion five-year 7B bonds at 6.1454 percent per annum.
In December 2024, DBP raised P11 billion via dual local bond offering, its first time to offer these notes. It has a minimum offer size of P2 billion. These were series 1.5-year 6A bonds with a yearly rate of 6.0503 percent and three-year 6B bonds with a rate of 6.1294 percent per annum.
DBP’s programs and projects are aligned with the Marcos administration’s long-term economic expansion and financial inclusion initiatives.
The bank mainly finances four priority sectors of the economy: infrastructure and logistics; micro, small and medium enterprises; the environment; and social services and community development.
As of end-March this year, DBP posted a net income of P1.608 billion, up by 82 percent year-on-year from P571 million, driven by interest income from its lending and investment portfolio, de Jesus said earlier.
Its total loans increased by almost 2 percent to P519 billion, versus P509 billion in the same period last year. About 60 percent of the banks’ loans, amounting to P314.7 billion, were borrowed to finance infrastructure and logistics-based projects, he added.
