The Department of Finance (DOF) said it is preparing the Development Bank of the Philippines (DBP) for greater financial stability and to become more responsive to Filipinos’ needs.
“The DBP has a very clear mandate: to drive economic growth by supporting the medium and long-term needs of agricultural and industrial enterprises. Hence, the reforms in its proposed new charter, including the Secretary of Finance’s assumption of the role of chair of the board, are precisely made towards strengthening its financial stability and capacity to drive national progress and uplift the lives of more Filipinos,” Finance Secretary Ralph Recto said in a statement Friday.
Approved on third and final reading in both Houses of Congress, the bill seeks to establish a new charter for the DBP to strengthen its powers and functions as the country’s premier financial institution for national development.
The proposed charter designates the DOF secretary as the ex-officio chairperson of the DBP board, ensuring government participation in the bank’s decision-making and alignment with its developmental mandate. The DOF has no representation on the current DBP board.
The proposal also includes the secretary of the National Economic and Development Authority (NEDA) as an ex-officio member and three independent directors.
The bill expands the DBP’s mandate, covering government programs that boost economic growth and increase productivity.
These include the development of digital and physical infrastructure, expansion of businesses and micro, small and medium enterprises (MSMES) and the development of high-impact programs in education, health care, housing, social services and environmental protection.
The DBP will also be mandated to implement government policies on priority area financing, enhanced competition in financial markets and promotion of financial sector development.
To strengthen its financial stability, the new charter authorizes the DBP to offer a maximum of 30 percent of its shares to the public or as it may deem necessary. This will enable the bank to raise capital to support its expanded mandate and to allow public participation.
The national government will retain at least 70 percent of its outstanding capital stock to ensure effective control of the bank.
The bill also increases the bank’s authorized capital stock (ACS) from P35 billion to P300 billion, enabling it to broaden its credit assistance to priority sectors and widen its menu of financial products and services.
The DBP is the eighth largest bank in the country by assets and was designated as the infrastructure bank by the national government. With a network of 146 full-fledged branches and branch lite units, the DBP serves many underserved and unbanked areas. Its charter was last amended in 1998 through Republic Act No. 8523.