Economy

DBP backs legislation amending bank charter

The Development Bank of the Philippines (DBP) said it supports the passage of a measure that will improve its ability to finance countryside development projects.

“The proposed amendments to the DBP Charter would be a boon to our efforts to undertake more developmental projects especially in the countryside, where these types of economic interventions are most sorely needed,” DBP President and Chief Executive Officer Emmanuel G. Herbosa said in a statement Friday.

Mr. Herbosa said the pending legislation that will amend its charter is House Bill 8454, introduced in January by Quirino Representative and Chairman of the House Committee on Banks and Financial Intermediaries Junie E. Cua. It is being discussed at committee level.

The charter amendments will enable the bank to expand its offering of financial products and services and authorize it to engage in non-traditional modes of financing businesses while enhancing its ability to comply with risk-based banking regulations.

Mr. Herbosa said the measure will allow the bank to expand its assistance to those in need due to the economic downturn.

DBP Senior Vice President for Legal Services Soraya F. Adiong said tweaks to the bank’s charter will “bolster existing governance mechanisms, tighten sanctions and penalties for specific violations and provide greater operational and organizational flexibility.”

Mr. Herbosa said he is hoping a counterpart bill will be filed soon in the Senate.

Earlier this month, House Bill 7749 or the proposed Government Financial Institutions Unified Initiatives to Distressed Enterprises for Economic Recovery (GUIDE) Act was approved on final reading in the House. The bill provides for an increase in the DBP’s capital stock to P100 billion.

The DBP’s authorized capital is currently at P35 billion. It was last raised in 1998 from P5 billion previously by Republic Act No. 8523.

DBP in December issued P21 billion in two-year peso bonds at a coupon of 2.5%.

The bank’s net profit at the end of September was down 27% at P3.24 billion.

The DBP was the ninth-largest bank with assets of P761.5 billion in 2019. — Luz Wendy T. Noble

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