DBP raises P11 billion from bond offering

MANILA, Philippines — The Development Bank of the Philippines  has successfully raised P11 billion through a dual bond offering to support the anticipated increase in lending activities this year.

In a statement, DBP president and CEO Michael de Jesus said the bank’s fixed rate series 6A bonds and fixed rate series 6B bonds were oversubscribed by five-and-a-half times over the minimum offer size of P2 billion.

The DBP said the local bond issuance is part of efforts to diversify the bank’s funding sources in anticipation of increased lending activities this year.

“This latest bond issuance is a testament to the trust and confidence of the market in DBP as a government financial institution and allows the bank to expand its funding sources even as it ramps up its lending activities in support of the Marcos Administration’s economic agenda,” De Jesus said.

The DBP fixed rate series 6A bonds were offered at an interest rate of 6.0503 percent per annum with a tenor of 1.5 years while the 6B bonds had a tenor of three years with an interest rate of 6.1294 percent per annum.

De Jesus said the DBP bonds, which were enrolled and traded through the Philippine Dealing and Exchange Corp., represent the sixth tranche of the bank’s P150-billion bonds program with the proceeds for financing loans to clients or supporting its own operating activities.

He added that this marks the first time that DBP issued two tenor bonds, adding that the bank is committed to offering tailored solutions to meet the diverse needs of its investors while also supporting its critical development goals.

DBP is the 10th largest bank in the country in terms of assets and provides credit support to four strategic sectors of the economy – infrastructure and logistics; micro, small, and medium enterprises; environment; social services and community development.

Earlier this month, the Department of Finance (DOF) commended the DBP for maintaining its strong financial position, noting that the DBP’s capital adequacy ratio (CAR) was at 14.78 percent as of November 2024.

It emphasized that this is well above the 10 percent regulatory threshold, demonstrating the bank’s resilience against financial and operational risk.

Despite the bank meeting its required capital ratios, De Jesus recently confirmed that the DBP would seek an extension of regulatory relief from the Bangko Sentral ng Pilipinas after contributing P25 billion to the Maharlika Investment Fund, emphasizing the importance of maintaining flexibility.

“We will seek regulatory relief for comfort. Even though we meet all the capital ratios, it’s always good to have that assurance,” De Jesus told reporters in a recent interview.

The relief measure, which includes adjustments to CAR, is typically renewed annually, with some spanning multiple years.

“Some ratios are for four years, some are every year. We’ll be asking for relief for the annual ones this year,” De Jesus said.