Development Bank of the Philippines (DBP) said it will request an extension of regulatory relief from the central bank, following its investments in the Maharlika Investment Fund (MIF), while the Land Bank of the Philippines (Landbank) does not see the need for it.
On the sidelines of the 2025 annual reception for the banking community hosted by the Bangko Sentral ng Pilipinas (BSP) on Friday, Jan. 10, executive officials of the government-owned financial institutions—in separate interviews—expressed opposing plans on seeking regulatory relief extensions.
DBP President and CEO Michael O. de Jesus told reporters that the bank will seek an extension of the regulatory relief it requested last year. “We will. Just for comfort, we will seek regulatory relief.”
In 2023, DBP remitted to the Bureau of the Treasury P25 billion for its investment in the MIF.
Despite his assurance that DBP will meet capital adequacy ratio (CAR) requirements, the bank would still seek additional comfort and reassurance by pursuing the same relief measures for this year.
De Jesus said the bank is working with the BSP on securing the regulatory reprieve since the current relief expires in 2025. DBP is focused explicitly on obtaining relief for the annual CAR.
In contrast, Landbank President and CEO Lynette V. Ortiz told reporters that while the regulatory relief acted as a safety cushion for two to three years, the bank now says it no longer needs it.
“If you look at our financials, [if] you look at our numbers, we have no need for it,” Ortiz said.
Ortiz asserted that Landbank’s financials show that it still meets its common equity tier 1 (CET1) requirements despite remitting P32 billion in dividends to the government in 2024, along with a P50 billion investment in the MIF.
According to Ortiz, Landbank had a decent income in 2024 and is focused on prudent risk management and assessing risks.
She noted that while the numbers are slightly lower relative to the previous year, “if you look at it line by line, our loans and investments remain very strong.”
However, recent typhoons have impacted Landbank’s clients, including farmers, cooperatives, and rural banks.
“They’ve been affected, but I’d have to say that relative to the overall portfolio, that impact does not find its way into the strength of our overall portfolio. We have sufficient buffers,” she stressed.
Bond issuance in 2025
Both Landbank and DBP are planning to issue bonds this year, aiming to raise a minimum of P5 billion to P10 billion in a single transaction.
For Landbank, Ortiz said it is aiming to tap into both the debt capital markets and grow its green and sustainability portfolios.
She said the bond issuance will be onshore in pesos to align with its predominantly peso-based balance sheet and avoid foreign exchange risk.
The bonds are expected to have a minimum tenor of five years, with some potentially extending to 10 years, in line with the duration of renewable energy projects.
Depending on the approval process, Landbank plans to launch the issuance in the second quarter of this year
Meanwhile, de Jesus said DBP has issued several bonds to refinance existing ones, describing bond issuance as a routine business activity.
He also said that the bank’s potential major bond issuance of P5 billion to P10 billion would be used to support the bank's liquidity and daily operational needs.