THE SENATE on Wednesday approved on second reading a bill that seeks to replace the current charter of the Development Bank of the Philippines (DBP) to raise its authorized capital stock to P300 billion and allow it to conduct an initial public offering (IPO).
Under Senate Bill No. 2804 or “The New Development Bank of the Philippines Act,” which will repeal Executive Order No. 81 issued in 1986 or DBP’s current charter, the state-run bank’s capital will be hiked to P300 billion from P35 billion — part of which can be raised via an IPO — to help finance its priority sectors.
“As a government financial institution, and a partner in national development, the bank shall support the programs of the government that propel economic growth and increase productivity such as the development of infrastructure, expansion of businesses especially micro, small and medium enterprises (MSMEs), and high-impact programs in education, healthcare, housing, other social services and those that support the protection of the environment,” it said.
“The bank shall serve as a national development policy bank to support and implement government policies on the direction of financial flows to priority areas, enhance competition in financial markets and promote financial sector development leading to capital allocation improvements thereby contributing to macroeconomic stability,” it added.
The measure said that the National Government will own 70% of the DBP’s capital stock at all times, with P32 billion or 10.67% being fully subscribed to and paid for by the state.
The President can also further raise the capitalization of the bank upon the recommendation of the Finance secretary, and may allocate part of all of DBP’s unrestricted retained earnings to fund the increase.
Under the bill, DBP’s board of directors will be made up of the Finance secretary as ex-officio chairperson, the National Economic and Development Authority secretary as an ex-officio member, five regular directors and two independent directors who will be appointed by the President.
The DBP will also be allowed to engage in financial leasing in connection with government projects.
“It is a win for every Filipino to have the DBP’s charter be aligned with the modern challenges and demands of the constantly changing economic and social landscape in the country,” Senator Mark A. Villar, one of the bill’s authors and its sponsor, said in a statement.
“This is the very mandate of the DBP — to provide development financing for Filipinos.” — J.V.D. Ordoñez