LandBank, DBP eyeing return to capital markets

LandBank and DBP Eyeing Return to Capital Markets

As the Philippine economy continues its recovery from the pandemic, state-owned banks Land Bank of the Philippines (LandBank) and Development Bank of the Philippines (DBP) are preparing for another round of capital raisings. Senior officials have confirmed that they will return to the bond market later this year to support their lending programs and projects.

LandBank's Plans

According to Lynette Ortiz, President and CEO of LandBank, the bank is planning a P50-billion bond offering, potentially towards the end of the year. This follows the success of its recent sustainability bond sale, which exceeded expectations. We are looking at issuing another bond this year, but it really depends on what we see in the pipeline, Ortiz noted.

DBP's Plans

Meanwhile, Michael de Jesus, President and CEO of DBP, has confirmed that the bank is planning more bond issuances this year to meet its funding requirements. We have planned more bond issuances for this year, he said. We are looking at issuing between P15 to P20 billion, possibly in the second half.

Past Performance

DBP previously raised P8.25 billion via a dual-tranche, peso-denominated bond offering last July. LandBank's Agriculture, Sustainability, Environment, and Socioeconomic Development (Asenso) bonds, which came in two tranches with tenors of 1.5 years and three years, raised P50 billion and exceeded the bank's original target of P30 billion.

Future Issuances

Ortiz noted that LandBank is open to offering longer maturities for its next issuance, pending investor demand and market conditions. For our second issuance, we will see what investors need, she said. If it is for project finance, then hopefully it will be a bit longer than three years, but it really depends on the market.

Conclusion

The planned bond issuances by LandBank and DBP are expected to support lending programs and projects in the Philippines, driving economic growth and development. As the country continues its recovery from the pandemic, these state-owned banks will play a crucial role in providing financing for key infrastructure projects and supporting small and medium-sized enterprises.

Keywords Land Bank of the Philippines, Development Bank of the Philippines, capital markets, bond issuance, sustainability bonds, project finance

Edward Lance Arellano Lorilla

CEO / Co-Founder

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