DBP extends P6.13 billion to pandemic-hit businesses
The Development Bank of the Philippines (DBP) has extended P6.13-billion in loans to enterprises badly hit by the economic shock of the COVID-19 pandemic and earmarked interest subsidies amounting to P27.13-million to local government units (LGUs) in 2020, in line with its goal to help keep the productive sectors of the economy afloat during this global crisis.
DBP President and Chief Executive Officer Emmanuel Herbosa said that to provide the bank with additional resources to help fund these efforts and the country’s economic recovery program starting this year, it plans to issue a US$300-million bond by mid-2021, along with the second tranche of its sustainability bonds sometime in November.
“These will not only provide the bank with the necessary liquidity to fuel the country’s economic recovery efforts but will also aid in the development of the Philippine capital markets moving forward,” Herbosa said in his presentation of DBP’s 2021 plans to Finance Secretary Carlos Dominguez III.
Herbosa said that as part of DBP’s innovative financing solutions, it is also planning to develop an LGU credit rating system together with the Department of Finance (DOF)-attached Bureau of Local Government Finance (BLGF) and the International Finance Corporation (IFC), in support of the development of a bond market for local government units (LGUs).
“Agri-Agra compliant bonds are also in the horizon as this will be timely upon the passage of the amendments to the Agri-Agra Law in support of the development of agriculture and agrarian reform,” Herbosa said.
Herbosa said DBP is also eyeing the development of an alternative trading system “in the near future” to anticipate the growth of the Philippine finance market.
“Our finance market is maturing, and more financial solutions are needed. The bank is in a good position to pioneer a system of exchange for new market securities,” he said.
Herbosa said that last year, the P6.13-billion in loans under the bank’s Rehabilitation Support Program on Severe Events (RESPONSE) program were approved for 25 private and public institutions to help sustain their operations during the pandemic and disbursement is already at P701.4-billion.
Five LGUs with a total loan amount of P450-million were the beneficiaries in 2020 of the bank’s Assistance for Economic and Social Development (ASENSO) program and seven LGUs were provided financing assistance in the form of interest subsidies earmarked amounting to P27.13-million, Herbosa said.
Herbosa said DBP also granted a 60-day moratorium period for 627 of its loan accounts amounting to P130-billion in compliance with the provisions of Republic Act (RA) No. 11494 or the Bayanihan To Recover As One Act (Bayanihan 2).
On top of assisting cash-strapped local governments during the pandemic, Herbosa said DBP is also supporting climate-crisis adaptation initiatives at the local level, which include its waste-to-energy projects that it expects to develop with LGU partners starting this year.