By Kenneth Christiane L. Basilio, Reporter
THE House of Representatives on Tuesday approved on third reading a bill that will replace the current charter of state-run Development Bank of the Philippines (DBP) to raise its authorized capital stock and allow it to conduct an initial public offering.
In a 199-3-0 vote, congressmen approved House Bill No. 11230, which repeals DBP’s almost 27-year-old charter to raise its capital stock to P300 billion from the current P35 billion.
The new charter also mandates the state-run lender to promote economic growth by supporting small businesses and “high impact programs,” such as infrastructure and housing developments, among other key provisions.
“This took us about nine years,” DBP President and Chief Executive Officer Michael O. de Jesus told BusinessWorld before the bill’s approval, referring to legislative efforts to update the state lender’s charter.
“This is going to be good for the bank and the country,” he added.
The Finance department has been pushing for congressional approval of DBP’s amended charter that is meant to strengthen its financial position and give it easier access to the capital markets, which would help fund its loans to its priority sectors, including social infrastructure and micro, small, and medium enterprises.
The Senate okayed its counterpart version of the measure in September 2024.
Both House and Senate versions of the measure allow the government to sell DBP shares to the public, provided that it retains a 70% stake. They also mandate that 10.67% or P32 billion of the bank’s shares should be subscribed to and paid by the government.
“We don’t intend to partly privatize right away. We intend to improve the bank, improve the valuations. That could take maybe three to five years,” Mr. de Jesus said.
“But we need to improve many things first. Our information and technology structure and our branches need to be improved.”
The DBP’s net income declined by 8.95% year on year to P4.68 billion in the first nine months of 2024 amid lower foreign exchange gains.
