MANILA, Philippines - The National Development Co. (NDC), the investment arm of the Department of Trade and Industry (DTI), may issue an initial P3 billion in infrastructure bonds in the first quarter of 2010 to finance reconstruction and rehabilitation projects.
The government plans to issue a total of P50 billion worth of infrastructure bonds to finance rehabilitation and reconstruction efforts after typhoons Ondoy and Pepeng recently ravaged the country.
NDC general manager Ma. Lourdes Rebueno said the bonds may be issued in tranches, depending on the project proposals they get from both the private sector and government agencies.
The agency is now studying a proposal to finance P3 billion worth of infrastructure projects. “The initial proposal is P3 billion but we are still evaluating it,” Rebueno said.
She said nothing is final yet as the NDC board is still looking into the proposed projects, particularly the documentation requirements.
Rebueno said that if approved by the board, the agency may issue an initial tranche of P3 billion in the first quarter of next year.
In August, President Arroyo signed Executive Order 824 which allowed the NDC to issue P50 billion worth of “NDC Infrastructure Bonds.”
Typhoons Ondoy and Pepeng have killed over 800 people and caused more than P20 billion in damage to farmlands and infrastructure.
The NDC is the corporate vehicle of the government that is mandated to pursue commercial, industrial, agricultural and other enterprises that can spur economic development.
On Wednesday, it issued P3.5 billion in Agri-Agra bonds, proceeds of which would be used to finance the irrigation projects nationwide. The bonds fetched a coupon rate of 5.125 percent as investors tendered a total of P7.350 billion, more than double the P3.5- billion targeted amount.
The bonds qualify as an alternative compliance of banks to the Agri-Agra Law. This law requires banks to invest 25 percent of their loan portfolio on agricultural ventures.
The latest Agri-Agra issuance represents the fourth tranche of P50 billion worth of bonds which NDC has been mandated to sell since 1998, mainly for various irrigation projects nationwide.
Rebueno said that similar to this, NDC’s infrastructure bonds may also be issued in tranches.