THE Development Bank of the Philippines (DBP) is eyeing a bond issuance in the second half of the year to raise fresh funds, its top official said.
“Our approved fund reserve for the year is around P45 billion. We have raised initially P8.75 billion in the first quarter. We intend to issue the balance depending on the market conditions,” DBP President and Chief Executive Officer Michael O. de Jesus told reporters last week.
The bonds will have short-term tenors and will likely be issued in the third or fourth quarter, he said.
The bond issuance could be peso or dollar-denominated, but the bank is more inclined to issue peso bonds, Mr. De Jesus added.
Proceeds will fund the bank’s general corporate requirements, he said.
Mr. De Jesus said the bank is bullish on its outlook for this year and expects the bank’s performance to be “slightly better” than in 2023.
“We’re optimistic. A lot of our loans now are to the power sector and the infrastructure. There’s still a lot of renewables we’re seeing. We always want to be selective in our loans,” he said.
“We’re not after a particular target, meaning a particular asset size. We want to make sure we’re very selective in what we do. We’re prudent.”
Latest data from the DBP showed that its net income jumped by 60% year on year to P4.42 billion in the first half of 2023.
Meanwhile, Mr. De Jesus said the bank is not seeking an extension of the regulatory relief granted to them by the central bank, saying this is “not on the table right now.”
The state bank, along with Land Bank of the Philippines (LANDBANK), were extended regulatory relief following their capital contributions to the Maharlika Investment Corp. (MIC). DBP and LANDBANK were required to provide P25 billion and P50 billion, respectively, to the MIC’s initial funding.
Finance Secretary Ralph G. Recto earlier said the banks could ask for an extension of the relief, but noted this was a “non-issue” as both banks’ financial positions are sound.
President Ferdinand R. Marcos, Jr. last year signed executive orders reducing both the banks’ dividend obligations to the National Government to 0% of their net earnings from 2022.
LISTINGOn the other hand, the DBP could list publicly as early as next year, Mr. De Jesus said. “If (the law) is passed this year, you could have an initial public offering (IPO) as early as next year.”
The Department of Finance is proposing to amend both the DBP and LANDBANK’s charters to raise their authorized capital stock and allow for their public listing. The proposal seeks to hike the DBP’s authorized capital stock to P300 billion from P35 billion and the LANDBANK’s to P1 trillion from P200 billion previously.
Mr. De Jesus said that the proposal has been submitted to Congress and is hopeful that this will be approved and passed into law within the year.
Apart from the hike in capital stock and public listing, he said the proposed charter amendments will increase the public ownership of the DBP.
“I think they even increased it from 20% to 30%. It’s a proposal of the DoF. All these have to go through the Senate,” he added, adding that the proposal ensures that the government will still hold a majority stake in the bank. — Luisa Maria Jacinta C. Jocson
