The Department of Finance (DoF) moves a step closer to having a seat in the state-owned Development Bank of the Philippines (DBP) as the bill seeking to amend the DBP charter was approved on the third and final reading in both houses of Congress.
The bill seeks to make the Secretary of Finance the ex-officio chairperson of the DBP board, ensuring government participation in the bank’s decision-making and alignment with its developmental mandate.
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.”
At the moment, the DoF has no representation on the DBP Board.
The bill also proposes to make the Secretary of the National Economic and Development Authority an ex-officio member, as well as the appointment of 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 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 the effective control of the bank.
The bill likewise increases the bank’s authorized capital stock from P35 billion to P300 billion to broaden its credit assistance to priority sectors.