MEASURES seeking to amend the charters of Land Bank of the Philippines (LANDBANK) and the Development Bank of the Philippines (DBP) do not need to be certified as urgent as both state-run lenders remain well-capitalized, Finance Secretary Ralph G. Recto said.
“It’s a priority, but I don’t know if you need to have it urgent,” Mr. Recto told reporters at a briefing on Jan. 16.
He said the bills will likely be passed by Congress in the coming months.
This comes as the International Monetary Fund (IMF), in a report last month, called for the restoration of capital for the two state-run banks after they contributed to the seed funding of the Maharlika Investment Corp. (MIC).
The IMF noted the importance of capital restoration and exiting regulatory relief “as soon as possible.”
LANDBANK and DBP contributed P50 billion and P25 billion, respectively, to the sovereign wealth fund.
“LANDBANK is well-capitalized. They have no issues. The DBP has retained earnings… To me, that’s a non-issue,” Mr. Recto said.
The Finance department is pushing for Congressional approval of bills seeking to replace the current charters of LANDBANK and DBP to strengthen the state-run lenders’ financial position.
These measures seek to increase the capitalization of both state-run banks, allow for their public listing, and streamline the bond issuance process, among others.
The LANDBANK bills, which are pending at the committee level at both the House of Representatives and the Senate, propose to increase its capitalization to P1 trillion from the current P200 billion.
Meanwhile, the measure that seeks to replace the DBP’s charter will raise the bank’s authorized capital stock to P300 billion from P35 billion.
Legislation on DBP’s new charter hurdled the Senate in September, while its counterpart House Bill No. 11230 was approved on second reading on Monday. — ARAI
