State-run banks eyed for capital mart funds By Reine Juvierre S. Alberto
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@reine_alberto
OVERNMENT agencies and corporations are directed by the Department of Finance (DOF) to route their investments in the capital market through state-run banks to avoid “missed opportunities” for the government to generate additional income. Finance Secretary Ralph G. Recto has issued Department Circular No. 001-2025, published in the DOF’s website last week, directing that capital market investments, such as fixed income and equity securities through public offerings, be coursed through government banks. This directive covers investments by national government agencies (NGAs), govern-
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ment-owned and -controlled corporations, government financial institutions (GFIs), government instrumentalities with corporate powers (GICPs) and government corporate entities (GCEs) in issuances where government banks serve as underwriter, bookrunner, issue manager or selling agent. Provident funds, retirement funds and similar funds of these agencies, except the Social Security System, Government Service Insurance System and Home Development Mutual Fund, are likewise encouraged to place their investments through state-run banks. If no government bank is participating in a particular issuance, state agencies are pushed to request the issuer to include a government bank as a selling agent, at minimum, the circular stated.
Moreover, if the lead arranger or underwriter of a securities issuance decides to not include government banks, state agencies wanting to invest must secure a formal letter from the lead arranger, underwriter or issuer and submit it to the DOF. Typically, large government agencies are considered qualified institutional buyers, with their investment participation allocated pro-rata across the syndicate or consortium of banks facilitating the issuance. Through this approach, placements do not necessarily benefit government banks, “resulting in a missed opportunity for the government to realize additional income,” the circular stated. National Treasurer Sharon P. Almanza told BusinessMirror on Monday that generating additional income for the government is the
intended outcome of the policy, though it would still depend on the structure of the issuance. “This is part of the DOF’s mandate to effectively and judiciously manage the financial resources not only of the national government but the public sector,” Almanza added. For state-run bank Land Bank of the Philippines, the policy is a “timely move” to align public investment strategies with national financial stability and growth goals, consistent with a whole-of-government approach. “The directive is expected to boost capital market participation and reinforce LandBank’s financial position, enabling the Bank to better support priority development projects and key sectors,” said LandBank in a statement sent to BusinessMirror.
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Tuesday, August 26, 2025 Vol. 20 No. 317
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By Cai U. Ordinario @caiordinario
HE growth of the country’s debt service burden (DSB) was flat in the first five months of the year, according to the latest data released by the Bangko Sentral ng Pilipinas (BSP). The data showed the country’s total DSB reached $5.869 billion in the January to May period. This was only 0.51 percent or $30,000 more than the $5.839 billion posted in the same period last year. BSP said the principal of the total debt service burden reached $2.645 billion, a 2.68-percent growth from the $2.576 billion posted in the same period last year. For interest, the data showed interest contracted 1.23 percent or $40,000 to $3.224 billion in January to May 2025 from $3.264 billion in January to May 2024. In terms of ratios, DSB to export shipments ratio declined to 23 percent in January to May 2025 from the 24.3 percent posted in the same period last year. The BSP also said the DSB to Exports of Goods, and Receipts from Services & Primary Income ratio declined to 9.3 percent in the first five months of the year from the 9.5 percent posted in the same period last year. The DSB to GDP ratio also de-
creased to 2.8 percent in January to May 2025 from the 3.1 percent recorded in the same period of 2024. BSP data showed the DSB to Gross National Income (GNI) ratio decreased to 2.5 percent this year from 2.7 percent last year. The central bank explained that the debt service burden represents principal and interest payments after rescheduling. These are principal and interest payments on fixed medium- and long-term (MLT) credits including International Monetary Fund (IMF) credits, loans covered by the Paris Club and commercial banks’ rescheduling, and New Money Facilities. Also included are interest payments on fixed and revolving short-term (ST) liabilities of banks and non-banks. However, it excludes prepayments on future years’ maturities of foreign loans and principal payments on fixed and revolving ST liabilities of banks and non-banks.
SWEEPING THROUGH HISTORY A heritage groundskeeper tidies up the Zapote battlefield ahead of this year’s National Heroes’ Day commemoration. The site, along Zapote Road at the Las
Piñas–Bacoor border, witnessed two pivotal clashes in Philippine history: the 1897 Battle of Zapote Bridge against Spanish forces, which claimed the life of General Edilberto Evangelista, and the 1899 Battle of Zapote River against American troops during the Philippine-American War. Today, historical markers, statues, and a promenade along Zapote Bridge honor these moments of bravery. NONIE REYES
HEAT STRESS TO COST ASEAN 13-M JOBS BY 2030–ILO REPORT By Justine Xyrah Garcia
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ISING heat stress caused by climate change could wipe out 3.7 percent of total working hours in the Association of Southeast Asian Nations (Asean) by 2030, the International Labour Organization (ILO) warned. In a new policy brief, the ILO said this loss of productivity is equal to about 13 million fulltime jobs, as soaring temperatures make it harder for millions of workers in the region to perform their tasks safely and effectively. The risks are greatest in Cambodia, Thailand and Viet Nam, where higher heat stress levels and deficits in decent work leave millions of workers exposed to
dangerous conditions. The ILO said labor-intensive industries such as agriculture, fisheries, manufacturing and construction are already showing signs of strain from heat, floods and extreme weather. These shocks not only erode output but also place millions of vulnerable workers at risk of displacement. In terms of exposure, the organization also noted that migrants are one of the most exposed, as nearly nine in 10 employed migrants in Asean’s destination countries are concentrated in industries and services highly prone to climate stress. Many work in factories with poor ventilation, on construction See “Heat,” A2
Ecozones new boon for LGUs, says Peza By Andrea E. San Juan
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@andreasanjuan
HE increasing purchasing power of Filipinos is enticing domestic marketoriented projects to set up shop in economic zones, according to the Philippine Economic Zone Authority (Peza). “We see more domestic market-oriented projects locating in the ecozones. The biggest come-on is our growing domestic market and increasing purchasing power with our growing middle class,” Peza Director General Tereso O. Panga told the BusinessMirror in a Viber message on Monday. Panga also noted: “In a way, this is a result of the emerging supply chain diversification due to the global trade dynamics.” In a statement on Monday, Panga revealed that 12 mayors from various LGUs across the country have “manifested” their intentions to establish new ecozones in their respective areas. The Peza chief explained, however, that of
these 12 LGUs, 10 are establishing an ecozone in their respective LGUs for the first time while Naga City and Victoria, Tarlac have already proclaimed their first ecozones in the previous years. “All 12 LGUs are not hosting ecozones yet— except for Naga City [Naga City Industrial Park, proclaimed last year], and Victoria, Tarlac [Victoria Industrial Park, 1st pharma park in the country, proclaimed last year],” Panga told this newspaper. The mayors of the 12 LGUs that manifested their intent to establish new ecozones are: Naga City Mayor Leni Robredo, Los Baños City Mayor Neil Nocon, San Pablo City Mayor Najie Gapangada, Libon Mayor Mac Sayson, Pamplona Mayor Dennis Imperial, Oroquieta City Mayor Lemuel Acosta, Silang City Mayor Ted Carranza, Leganes Mayor Junjun Jaen, Victoria Mayor Rex Villa Agustin, Pagudpud City Mayor Ralph Benemerito, Digos City Mayor Josef Cagas, and San Andres Mayor Ralph Lim. “We certainly welcome these new host LGUs to join the Peza network of 427 operating
ecozones [and counting] all over the country,” Panga said. Per the Peza chief, all 12 LGUs are eyeing to establish manufacturing ecozones while “others are setting up multiple ecozones to include agro-processing, IT park and tourism.” Panga said the developers who are set to file their applications within the next two months are San Andres, Libon, Pamplona, Leganes and Silang. “Almost all of the ecozone developers are from the private sector. The LGU/governmentinitiated ecozones are by Libon, Leganes and Pagudpud,” the Peza chief said. He noted that the biggest ecozones set to be applied within the year and deemed “bigticket” are the San Andres, Pantao (Libon) by Peza, and Leganes—all with direct access to a seaport. For the big-ticket ecozones, these are the prospective locators: “For San Andres, Quezon, steel manufacturing [Chinese], biomass power plant, activated carbon; For Libon, Albay: steel manufacturing [Chinese], activated carbon and
special aviation fuel [British], sack manufacturing [Filipino], EV tri-wheel transport assembly [Filipino]; For Leganes, which is LGU-initiated, port development, cement manufacturing, light to medium industry—mostly Filipino domestic producers.” The Peza visited proposed ecozones in San Andres, Quezon, 135 hectares; Pamplona Camarines Sur, 60 hectares; and Libon, Albay, 40 hectares for the “conduct of due diligence and consultation meetings with the proponents and stakeholders.” “These three ecozones are strategically located along the Bicol and Bondoc Peninsulas, fronting the Ragay Gulf—the third-largest gulf in the Philippines,” per Peza’s website. Providing for port connectivity among San Andres, Pasacao and Pantao ports, Peza said, “will stimulate regional economic growth as the goods produced and raw materials needed in the ecozones can be facilitated through barge deliveries.” These ports can serve as “vital gateways” for See “Ecozones,” A2
PESO EXCHANGE RATES n US 57.2280 n JAPAN 0.3858 n UK 76.7599 n HK 7.3237 n CHINA 7.9703 n SINGAPORE 44.4179 n AUSTRALIA 36.7289 n EU 66.4474 n KOREA 0.0409 n SAUDI ARABIA 15.2498 Source: BSP (August 22, 2025)