It’s not only in politics that “cha-cha” (charter change) is becoming a much-talked-about issue.
A top official of the Development Bank of the Philippines (DBP) announced recently that the state-owned bank is now working closely with the Department of Finance (DOF), as well as major state regulators and legislators in the country in introducing reforms in its 26-year-old charter.
The move is in line with DBP’s desire to cater to the demands of an ever-changing market and rapidly evolving economic landscape.
IMAGE CREDIT: https://www.dbp.ph/
DBP President and Chief Executive Officer Michael O. de Jesus said the bank hopes to hike its authorized capital stock from the current P35 billion to P300 billion to enable DBP to broaden its credit assistance to priority sectors and broaden its menu of financial products and services.
“We are working hand-in-hand with all stakeholders, especially the DOF, in ensuring that DBP would be able to finance more developmental projects, especially in the countryside,” de Jesus said.
“These amendments are needed to boost our financial position and make the bank responsive to the evolving needs of our clients,” he further stated.
Charter last amended in 1998
DBP is the eighth largest bank in the country in terms of assets and has been designated as the Infrastructure Bank by the National Government. It has a branch network of 146 full-fledged branches and branch lite units, most of which are located in underserved and unbanked areas of the country.
DBP’s charter was last amended in 1998 through Republic Act No. 8523, which raised the bank’s authorized capital stock from P5 billion to P35 billion.
The bank was originally founded as the Rehabilitation Finance Corporation, which was part of mechanisms to jumpstart reconstruction and economic revival after the devastation of World War II.
De Jesus said several bills have been filed and are pending in the Committee on Banks and Financial Intermediaries of the House of Representatives, while a similar version is expected to be filed in the Senate.
He said the proposed changes would allow DBP to engage in traditional and non-traditional modes of financing businesses while enhancing its compliance with risk-based banking laws and regulations.
“The new charter would also bolster existing governance mechanisms and provide greater operational and organizational flexibility for the Bank,” de Jesus said.
“It would also grant perpetual corporate existence to the Bank while allowing it to declare all of its net earnings as payment of capital subscriptions of the National Government,” he added.
“DBP is also committed to work with the National Government and the DOF in the wake of proposals to publicly list state-owned banks,” de Jesus added.