MANILA, Philippines--The state-owned Development Bank of the Philippines plans to avail itself of a P10.1-billion loan from Japan Bank for International Cooperation for relending to "green" projects across the country.
Banking sources said proceeds from the funds, which will be part of the 27th yen loan package from Japan, would be channeled to eligible sub-borrowers to finance environment-related projects, including those that promote clean energy resources. Specifically, the funds will support industrial pollution control as well as new and renewable energy projects.
The DBP is now seeking approval from the BSP's policy-making Monetary Board for the foreign loan, which is equivalent to 24.8 billion yen. The central bank is mandated by law to screen all public sector borrowings as well as foreign loans of the private sector whose repayment will come from the local banking system.
A loan agreement with JBIC is expected to be finalized in two months, DBP sources said.
On the other hand, the DBP has finalized with JBIC another P10-billion loan for "clear mechanism development" projects which will likewise support new and renewable energy projects. The agreement on this loan, which was earlier approved by the BSP, will be signed in the next few days.
Meanwhile, banking sources said DBP would begin this week the offering of as much as P7.65 billion worth of debt notes that will qualify as tier 2 or supplementary capital.
DBP will offer lower tier 2 notes or subordinated notes with a maturity of 10 years and subject to optional redemption by the issuer after five years.
Deutsche Bank, First Metro Investment Corp. and HSBC are arranging DBP's offering.
The issuance allows DBP to strengthen its capital base while providing investors with an attractive alternative to deposit products and other debt securities. The minimum denomination was set at P500,000 with increments of P100,000 thereafter.
The proceeds are expected to beef up DBP's capital adequacy ratio by 2-3 percentage points from about 20 percent at present.
