State-run Development Bank of the Philippines (DBP) has started extending loans to enterprises badly hit by the economic shock of the pandemic and earmarked interest subsidies to local government units (LGUs), the Department of Finance (DOF) said.
In a report submitted to the DOF, Emmanuel G. Herbosa, DBP president and chief executive said the lender extended P6.13-billion in loans to affected enterprises last year and has set aside P27.13-million in interest subsidies to LGUs.
Herbosa said the P6.13-billion approved loans were for 25 private and public companies, while five LGUs with a total loan amount of P450-million were set to receive P27.13-million in interest subsidies from DBP.
Herbosa said DBP’s financing support to businesses and LGUs is in line with the government’s goal to help keep the productive sectors of the economy afloat during the global crisis.
On top of assisting cash-strapped local government, Herbosa also said DBP is supporting climate-crisis adaptation initiatives at the local level, which include its waste-to-energy projects that it expects to develop with LGU partners starting this year.
DBP will step up implementation of its loan and assistance programs to continue supporting industries and enterprises that have been gravely affected by the pandemic, Herbosa assured.
In line with this, Herbosa reported to the DOF that they recently sold $300-million bonds in the overseas markets to provide DBP with additional resources.
The DBP chief also said the bank plans to issue the second tranche of its sustainability bonds in November.
“These will not only provide the bank with the necessary liquidity to fuel the country’s economic recovery efforts but will also aid in the development of the Philippine capital markets moving forward,” Herbosa said in his report to Finance Secretary Carlos G. Dominguez III.
Herbosa added that the DBP is also eyeing the development of an alternative trading system “in the near future” to anticipate the growth of the Philippine finance market.
“Our finance market is maturing, and more financial solutions are needed. The bank is in a good position to pioneer a system of exchange for new market securities,” he said.
DBP will likewise fully operationalize this year its six new Provincial Lending Centers in support of the targeted 7.0 percent growth on its loan portfolio to reach P451.06-billion by year-end.
“This growth duly considers DBP’s commitment under Bayanihan 2 to actively assist borrowers from micro, small, and medium enterprises (MSMEs) even as we keep our focus on supporting the infrastructure needs of the country,” he said.