DBP to adjust lending portfolio to ‘maximize’ benefit to slowing economy

THE Development Bank of the Philippines (DBP) said it is adjusting its lending portfolio to favor priority sectors with the most potential development impact as the economy braces for a severe economic downturn, its CEO said Friday.

DBP President and CEO Emmanuel G. Herbosa said the review will allow the bank to “concentrate on initiatives” supporting key sectors while “ensuring profitability and sustainability” for the bank as the economy slows.

“We are rationalizing our lending programs to maximize available resources to our priority sectors as we assist them in coping with the challenges of a vastly-changing socio-economic landscape,” Mr. Herbosa was quoted as saying in a statement.

He said “updating the features” of some the bank’s programs will be in line with the changing needs of the market and as the bank prepares for a bigger role that it will play in implementing the stimulus bills that are pending in Congress.

Currently, a majority of the bank’s loans are devoted to infrastructure and logistics; micro, small and medium enterprises; the environment; social services and community development.

Mr. Herbosa did not cite details of the portfolio adjustments. The DBP had yet to reply at deadline time.

Under the proposed Bayanihan II law, the DBP and the Land Bank of the Philippines (LANDBANK) will introduce low-interest loan programs to affected non-essential businesses.

Also, around P15 billion will be earmarked to supplement the DBP’s capital while LANDBANK will be getting P30 billion, with both acting as the wholesale banks.

“It is imperative for all financial institutions, such as the DBP, to productively use their available resources to benefit more stakeholders as we gradually emerge from this pandemic,” Mr. Herbosa said.

He added that the DBP and institutional partners will ensure that the resources are “maximized” with no program “redundancies.”

The bank’s net profit fell 7% to P1.46 billion in the first quarter after it increased loan loss provisions due to the pandemic. — Beatrice M. Laforga