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Manila Bulletin devider Business devider Banking & Finance devider DBP braces for up to ₱2-billion dent in 2025 earnings amid looming rise in bad loans

DBP braces for up to ₱2-billion dent in 2025 earnings amid looming rise in bad loans

Published Nov 28, 2025 04:44 pm

At A Glance

  • State-run Development Bank of the Philippines (DBP) is expecting a decline of up to ₱2 billion in its full-year net income as the bank has set aside additional provisions for looming bad loans caused by delayed payments from contractors involved in public infrastructure projects.
State-run Development Bank of the Philippines (DBP) is expecting a decline of up to ₱2 billion in its full-year net income as it has set aside additional provisions for looming bad loans caused by delayed payments to contractors involved in public infrastructure projects.
DBP President and Chief Executive Officer (CEO) Michael O. de Jesus told reporters on Thursday, Nov. 28, that the anticipated rise in non-performing loans (NPLs) due to the flood control fiasco will dent the bank’s earnings this year.
“We have several NPLs—some are big amounts, but not too many—so we have to set aside provisions for those. That will eat into our net income,” De Jesus said.
The DBP chief said the lender aims to fully cover its soured loans, with about 90 to 95 percent already provisioned.
He explained that the anticipated NPL uptick is linked to delayed payments affecting contractor-borrowers, particularly amid ongoing investigations into flood control and other infrastructure projects.
“Even the good contractors are having problems with some of their receivables,” De Jesus said, adding that while the flood control graft issue has yet to inflict damage on the bank’s performance, DBP expects “some of its borrowers will be affected in terms of loan repayments.”
Despite the short-term hit, De Jesus expects recovery next year. “We expect a strong 2026,” he said.
With infrastructure lending accounting for roughly 50 to 60 percent of DBP’s loan book, it is bracing for continued pressure on loan repayments while maintaining strict governance standards in project financing.
“Like many banks, we have numerous contractors as customers, so we’re being very careful. We make sure there are no ghost projects and no flood control projects. We’re much stricter than ever when it comes to dealing with contractors,” he said.
According to him, DBP currently has no investments in flood control infrastructure projects. Even legitimate flood control projects are on hold until the new national commission is formed to coordinate such initiatives, he added.
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