Investor confidence drives DBP bonds to P8.25B

In a move to ramp up support for the government’s economic agenda, the state-owned Development Bank of the Philippines (DBP) has successfully raised P8.25 billion through a dual-tranche bond issuance.

The offering, which is part of DBP’s expanded P150-billion bond program, was 1.65-times oversubscribed from the initial target of P5 billion, according to DBP President and CEO Michael de Jesus.

“DBP’s latest successful mobilization of the capital markets allows it to expand its funding base and subsequently, finance more projects and initiatives that complement President Ferdinand Marcos, Jr.’s vision of sustaining long-term economic expansion and promoting greater financial inclusion,” de Jesus said.

The funds will be used to support the Bank’s general corporate requirements, including balance sheet expansion and diversification of funding sources. Proceeds are also earmarked to fuel DBP’s strategic lending activities aimed at high-impact sectors, particularly infrastructure, micro, small and medium enterprises (MSMEs), environmental initiatives, and community development.

The offering marked DBP’s seventh tranche of fixed-rate Series 7 bonds, comprising P3.457 billion worth of 7A Bonds with a 5.8751 percent annual interest rate and a three-year tenor, and P4.793 billion in 7B Bonds carrying a 6.1454 percent interest rate and five-year maturity.

The bonds were listed and traded on the Philippine Dealing and Exchange Corporation. China Bank Capital Corporation acted as the issue manager, sole arranger, and sole bookrunner.

“This latest bond issuance is also reflective of the unwavering trust and confidence of the market in DBP as a strong and relevant government financial institution – one that plays a crucial role in advancing sustainable and inclusive economic growth, especially in unserved and underserved areas of the country,” de Jesus added.

Commenting on the development, Rizal Commercial Banking Corporation Chief Economist Michael Ricafort said, “It is a win-win for investors of the bond and for the bank."

"Investors get to enjoy relatively higher bond yields near cycle or multi-year highs, while the Bank would have more funds to fulfill its mandate of more inclusive economic growth and development through financing many businesses and industries, especially MSMEs, and other infrastructure-and development-related financing.”

DBP is currently the 10th largest bank in the country in terms of assets and continues to play a vital role in the government’s push for sustainable development and financial inclusion across the archipelago.