DBP looks to fund infrastructure projects with bond issue proceeds
DEVELOPMENT Bank of the Philippines (DBP) is looking to fund public infrastructure projects using the P8.75 billion it raised through fixed-rate bonds last month.
“We hope to utilize proceeds from our Fixed-Rate Series 5 Bonds to boost credit support to our priority sectors while jumpstarting investments in the essential areas identified by the National Government including Public-Private Partnership initiatives,” DBP President and Chief Executive Officer Michael O. de Jesus said in a statement on Friday.
DBP is interested in financing both public and private firms that would invest in sectors such as food security, energy, agro-industrial ventures, telecommunications, and road networks.
The bank is also looking to finance water-related projects to help augment supply amid an expected increase in demand due to the El Niño weather event.
This is in line with the bank’s mandate of providing credit assistance to the four strategic sectors of the economy, namely infrastructure and logistics; micro, small, and medium enterprises; the environment; and social services and community development.
The state-run lender said it saw strong demand for its issuance of Series 5 bonds due 2025 that was oversubscribed by more than four times the target amount of P2 billion. The bonds fetched an interest rate of 6.102% per annum.
“With this issuance, DBP takes another crucial step to shore up economic recovery and resilience efforts in the postpandemic era for the Philippines with the bank leading the way in channeling much-needed capital into the economy while facilitating investments in key sectors to boost economic activity,” Mr. De Jesus said.
He earlier said the bank expects its loans to grow by 10% this year.
The bank will also use the bond’s proceeds for general corporate requirements, including funding source diversification, and balance sheet expansion, he said.
DBP’s net profit rose by 60% year on year to P4.42 billion in the first half of 2023, driven by gains from foreign exchange and the sale of properties.