The Land Bank of the Philippines (LANDBANK) has recently taken the lead in strengthening the country’s power industry by extending a significant portion of the P110-billion syndicated loan facility to the state-owned Power Sector Assets and Liabilities Management (PSALM) Corporation.
Photo shows PSALM President and CEO Dennis Edward A. Dela Serna (2nd from right), LANDBANK President and CEO Lynette V. Ortiz (right), and DBP President and CEO Michael O. de Jesus (3rd from right) while leading the ceremonial signing for a P110-billion syndicated loan for PSALM in Quezon City, with Assistant Government Corporate Counsel Judge Basilia Serrano-Angeles (left) serving as a witness.
According to the bank’s press release, this initiative underscores LANDBANK’s unwavering commitment to supporting the nation’s energy sector and enhancing its competitiveness on a global scale.
LANDBANK has committed a substantial P60 billion to the syndicated loan, which forms the backbone of the P110-billion facility. The funds from this loan will be instrumental for PSALM in several critical areas: augmenting its working capital, refinancing existing liabilities, and settling domestic contractual obligations.
These financial maneuvers are expected to stabilize and fortify the operations of PSALM, ensuring that it continues to fulfil its mandate effectively.
LANDBANK is currently the largest development financial institution in the country promoting financial inclusion, digital transformation and sustainable development to benefit Filipinos. It is present in all 82 provinces in the country and remains committed to providing accessible and responsive financing to drive the agriculture sector’s productivity and competitiveness while championing sustainable development in the countryside.
LANDBANK: Addressing the energy needs of the country
“LANDBANK has a long-standing history of supporting the National Government’s electrification initiatives, with our loan portfolio encompassing a wide range of energy-related projects. We will continue to support PSALM in addressing the energy needs of the country today and into the future,” stated LANDBANK President and CEO Lynette V. Ortiz. Her remarks reflect the institution’s dedication to sustaining the country’s energy needs and driving its development goals forward.
The formal agreement for the P110-billion syndicated loan was ceremonially signed on July 30, 2024, in Quezon City. This significant event was led by PSALM President and CEO Dennis Edward A. Dela Serna, LANDBANK President and CEO Lynette V. Ortiz, and Development Bank of the Philippines (DBP) President and CEO Michael O. de Jesus. The ceremonial signing was witnessed by Assistant Government Corporate Counsel Judge Basilia Serrano-Angeles, underscoring the high level of government support and oversight for this critical financial transaction.
During the ceremony, PSALM President and CEO Dennis Edward A. Dela Serna expressed deep appreciation for the continued support from LANDBANK, DBP, and the Office of the Government Corporate Counsel (OGCC). “PSALM’s liability management program has presented significant challenges as we strive to fulfill our mandate of liquidating the financial obligations we have assumed. This syndicated loan provides additional financial support to PSALM, ensuring our continued progress and assists our asset management and privatization strategies,” Dela Serna remarked.
In addition, Dela Serna also highlighted the financial impact of the loan, projecting a net reduction of PHP12.9 billion in PSALM’s financial obligations for the calendar year 2024.
The syndicated loan facility, jointly arranged by LANDBANK and DBP, demonstrates the collaborative effort between these financial institutions to support a critical component of the nation’s infrastructure. DBP’s Trust Banking Group acted as the Facility and Paying Agent, while the OGCC served as the Transaction Counsel, ensuring that all legal and regulatory requirements were meticulously met.
PSALM, a government entity created under the Electric Power Industry Reform Act (EPIRA), plays a pivotal role in managing and privatizing the assets of the National Power Corporation (NPC), including its generation assets, independent power producer (IPP) contracts, real estate, and the transmission business previously managed by the National Transmission Corporation (TransCo).
The agency’s mandate is not only to manage these assets but also to liquidate all financial obligations of the NPC in the most efficient and effective manner possible.
LANDBANK has been a steadfast partner to PSALM since 2008, consistently providing essential financing to support its mission under the EPIRA law. This long-standing partnership is a testament to LANDBANK’s broader commitment to the development of the energy sector in the Philippines.
Beyond PSALM, LANDBANK continues to support other key industry players, including large oil companies, power producers, and distribution utilities, through its comprehensive loan portfolio.
As the largest development financial institution in the Philippines, LANDBANK remains at the forefront of promoting financial inclusion, digital transformation, and sustainable national development. With a presence in all 82 provinces, the bank is dedicated to delivering accessible and responsive financial solutions that empower Filipinos from the countryside to the country.
This latest financial support to PSALM not only reinforces LANDBANK’s role in the nation’s development but also highlights its pivotal contribution to ensuring the stability and competitiveness of the Philippine power sector for years to come.