Development Bank of the Philippines (DBP) said net profit fell 7% year-on-year in the first quarter after the state-owned bank raised its provisioning level for possible loan losses and mobilized its resources to lend more in aid of the government’s economic revival program.

In a statement Friday, DBP President and CEO Emmanuel G. Herbosa did not project the extent of the expected loan losses, saying only that the bank’s net profit of P1.46 billion in the three months to March was accompanied by a 30.6% increase in its loan portfolio to P371 billion.

Mr. Herbosa said 45% of its portfolio funded the infrastructure and logistics sector, while 20% was allocated to social services while 11% supported environmental projects.

Lending to micro, small and medium-sized enterprises (MSMEs) totaled P27 billion.

He said the bank’s 30 lending units were “aggressive” in handing out loans, as the government mobilized state-owned banks to extend support to battered companies that could not operate during the lockdown.

Gross income rose 9.5% to P8.45 billion in the three months, while deposits rose 25.5% to P559.68 billion.

The capital adequacy ratio was 13.03% at the end of March.

Assets rose 20% year-on-year to P763.24 billion at the end of the quarter.

“DBP is currently reviewing its financial targets in light of this global pandemic. The bank is calibrating its programs to support the national government’s efforts to stimulate the economy after quarantine restrictions were relaxed,” Mr. Herbosa said in the statement.

The government’s economic team proposed to add at least P50 billion to the capital of state-owned banks including DBP and Land Bank of the Philippines. They are being positioned as wholesale banks, buying up loans from small banks to clear their books and make room for more lending.

“We are ready to provide the necessary funding support for key businesses and industries in order to stave off possible recessional effects of this pandemic,” Mr. Herbosa said.

Currently, the bank has 129 branches, 11 branch-lite units and 837 automated teller machines. — Beatrice M. Laforga

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