The Development Bank of the Philippines (DBP) needs to change its charter and triple its authorized capital from P35 billion to P100 billion to broaden its credit assistance to priority sectors.
“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,” stressed President and Chief Executive Officer Emmanuel G. Herbosa.
The state-owned bank is working with the Department of Finance, state regulators and legislators to amend its charter.
DBP’s charter was last amended in 1998 through Republic Act No. 8523, which raised the bank’s authorized capital stock from P5 billion to P35 billion.
Originally founded as the Rehabilitation Finance Corporation, the bank was part of the state mechanism to jumpstart reconstruction and economic revival after World War II.
The current proposed amendment is pending with the House of Representatives’ Committee on Banks and Financial Intermediaries.
DBP hopes the Senate will also file a counterpart bill to fast-track the passage of the measure before Congress takes a break for the 2022 national elections.
“We pledge our full support and cooperation to our legislators and policy-makers in our effort to strengthen DBP’s charter and make it more relevant to the demands of a rapidly-evolving economic landscape,” Herbosa underscored.
The proposed changes would allow the bank to broaden its menu of financial products and services, explained Senior Vice President for Legal Services Group Soraya F. Adiong.
DBP can have the authority to engage in traditional and non-traditional modes of financing businesses while enhancing its compliance with risk-based banking laws and regulations.
The new charter would also bolster existing governance mechanisms, tighten sanctions and penalties for specific violations and provide greater operational and organizational flexibility for the bank, she added.
“Another key component of the amended charter is the grant of perpetual corporate existence to the bank while providing greater leeway for the National Government to increase its capitalization without the need for legislation,” Adiong pointed out.
DBP is the seventh largest bank in the country in terms of assets and has been designated as the Infrastructure Bank by the National Government.
It has a branch network of 140 branches and branch lite units, most of which are located in underserved and unbanked areas of the country.