MANILA, Philippines — State-run Land Bank of the Philippines is preparing to access the debt markets to raise at least P10 billion this year via the issuance of bonds, expanding its green and sustainability portfolios, its top official said.
Landbank president and CEO Lynette Ortiz said that the bank aims to finance projects aligned with its commitment to sustainability, such as renewable energy and clean energy initiatives, through green, blue or sustainability-linked bonds.
“We would like to access the debt capital markets,” she said. “What we’d like is to further grow our sustainability portfolio. We want to match it with bonds that are either green, blue or sustainable-linked.
“We’re working on that, and it depends on all the approvals. We’re hoping it can be done this year, 2025,” Ortiz told reporters.
Landbank is also targeting to raise at least P10 billion in its bond issuance, with the potential for oversubscription depending on investor interest.
The state-run bank plans to issue peso-denominated bonds to mitigate foreign exchange risks, considering its predominantly peso-based balance sheet and clientele.
The proposed bonds are expected to have a minimum tenor of five years, aligning with the nature of the projects the state-run bank aims to fund.
“Minimum five years should be the sweet spot. If we could go longer, it would depend on the projects. For example, solar projects could have shorter terms, but generally, we’re looking at five to 10 years,” Ortiz said.
While Landbank initially aimed for an earlier timeline, the bond issuance is now anticipated to proceed by the second quarter of 2025, subject to securing all necessary approvals.
However, the process may face delays due to the lengthy approval requirements mandated by Landbank’s charter as the bank needs to get approvals from the Monetary Board, the National Economic and Development Authority and the Office of the President.
Ortiz said that amending the Landbank’s charter would allow the institution to respond more promptly to market changes.
“If our charter is amended, we hope to shorten this process to respond more swiftly to market conditions,” Ortiz said, noting that delays in obtaining approvals could result in missing favorable market opportunities.
Efforts to amend Landbank’s charter are being spearheaded by the Department of Finance (DOF).
“The finance secretary has been vocal about wanting this passed. For Landbank, it would be beneficial, but it’s really the DOF driving the proposal,” she said.