The proposed amendments to the Development Bank of the Philippines charter will allow the Department of Finance (DOF) to steer the bank to greater financial stability, Finance Secretary Ralph Recto said.
“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,” Recto said in a statement Friday.
The bill, which seeks to establish a new DBP charter, was approved on the third and final reading in both houses of Congress.
The proposed charter seeks to, among others, make the Secretary of Finance as the ex-officio chairperson of the DBP Board, ensuring government participation in the bank’s decision-making and alignment with its developmental mandate.
At present, the DOF has no representation on the DBP Board.
The proposal also includes the Secretary of the National Economic and Development Authority as an ex-officio member, as well as three independent directors.
The bill also expands the DBP’s mandate, covering government programs that boost economic growth and increase productivity.
This includes 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, allowing the bank to raise capital to support its expanded mandate and to allow public participation.
The national government shall retain at least 70 percent of its outstanding capital stock to ensure effective control of the bank.
The bill likewise increases the bank’s authorized capital stock from PHP35 billion to PHP300 billion to broaden its credit assistance to priority sectors. (PNA)
