The Department of Finance (DOF) has recently lauded the robust financial health of the Land Bank of the Philippines (LANDBANK) and the Development Bank of the Philippines (DBP), highlighting their critical role in driving national progress.
According to the DOF, both state-owned banks have consistently demonstrated exceptional financial performance, exceeding regulatory requirements and positioning themselves to expand their services to Filipinos across various sectors.
LANDBANK and ADB show strong financial footing
As of November 2024, LANDBANK’s Capital Adequacy Ratio (CAR) stood at a robust 16.42%, while DBP’s CAR reached 14.78%.
These figures significantly surpass the 10% minimum threshold set by the Bangko Sentral ng Pilipinas (BSP), a testament to the banks’ resilience and ability to withstand potential financial shocks.
“The strong financial footing of LANDBANK and DBP reaffirms their indispensable role in advancing the nation’s progress,” emphasized Finance Secretary Ralph G. Recto. “This allows them to effectively utilize their resources to deliver more support to Filipinos, particularly in key sectors such as infrastructure, agriculture, fisheries, and micro, small, and medium enterprises (MSMEs).”
LANDBANK President and CEO Lynette V. Ortiz echoed this sentiment, stating, “Our robust financial health and consistent revenue growth empower us to fulfill our mandate, serving as a dependable partner in the national government’s inclusive development agenda.”
For his part, DBP President and CEO Michael O. de Jesus expressed similar confidence, stating, “DBP remains financially strong and more than capable to support President Ferdinand Marcos, Jr.’s 10-point economic agenda while pursuing our mandate and serving the needs of our clients and stakeholders with passion and conviction.”
Actively pursuing legislative amendments
To further enhance the financial strength and operational efficiency of these vital institutions, the DOF is actively pursuing legislative amendments to the charters of LANDBANK and DBP.
A key aspect of these proposed amendments involves enabling the banks to access private capital through public offerings of a portion of their shares. This move will diversify their funding sources, reducing reliance on government support and fostering greater financial sustainability.
Furthermore, the proposed amendments to LANDBANK’s charter aim to streamline the bank’s bond issuance process, mirroring the existing framework for DBP.
This will allow both banks to efficiently access capital from the market, enhancing their flexibility and responsiveness to evolving economic needs.
These developments signify a positive trajectory for the state banking sector. By strengthening their financial positions and expanding their access to capital, LANDBANK and DBP are poised to play an even more crucial role in supporting economic growth, fostering inclusive development, and empowering Filipino communities.
This proactive approach demonstrates the government’s commitment to ensuring that these vital institutions remain strong and resilient, capable of meeting the evolving needs of the nation for years to come.
In December last year, the international lender has announced that it anticipates the Philippine economy to grow by 5.7 per cent in 2024, which is the same as the GDP growth estimate it published in September.