The Department of Finance (DOF) said Land Bank of the Philippines and the Development Bank of the Philippines (DBP) have robust financial performance, making them more well-equipped to provide more services to Filipinos.
Both state-owned banks have consistently met and exceeded the minimum requirements of the Bangko Sentral ng Pilipinas (BSP) for capital adequacy ratio (CAR), which is a critical benchmark of financial health, the DOF said.
It said that as of end-November 2024, LandBank’s CAR remains at a healthy level of 16.42 percent, while DBP’s level is at 14.78 percent. These are both well above the 10 percent regulatory threshold, demonstrating the state banks’ resilience against financial and operational risks, the DOF said.
“The solid financial footing of LandBank and DBP reaffirms their indispensable role in advancing the nation’s progress. This allows them to continuously adhere to prudent financial management practices and effectively utilize their resources to deliver more support to Filipinos, especially in key sectors like infrastructure; agriculture; fisheries; micro, small, and medium enterprises, and many more,” Finance Secretary Ralph Recto said.
Recto issued the statement after the International Monetary Fund said in a report that “implementing capital restoration plans for the two state-owned banks following their contribution to the Maharlika Investment Corp.’s start-up capital and exiting regulatory relief as soon as possible is important.”
Maharlika Investment Corp. (MIC), which manages the newly-formed sovereign wealth fund, said it would not return the P75-billion capital infused by LandBank and DBP despite the IMF report.
“Our robust financial health and consistent revenue growth empower us to fulfill our mandate, serving as a dependable partner in the national government’s inclusive development agenda,” said LandBank president and chief executive Lynette Ortiz.
“DBP remains financially strong and more than capable to support President Ferdinand Marcos Jr.’s 10-point economic agenda while pursuing our mandate and serving the needs of our clients and stakeholders with passion and conviction,” said DBP president and chief executive Michael de Jesus.
To further strengthen the financial standing of state banks, the DOF is advocating for Congressional approval of amendments to the charters of LANDBANK and DBP.
A key feature of these amendments is enabling the banks to access private capital by offering a portion of their shares to the public.
The proposed amendments to LandBank’s charter include a provision to streamline the bond issuance process, similar to that of DBP. This change would allow the banks to access capital more efficiently, reducing their reliance on national government support or dividend relief.
