In a significant move to bolster the Development Bank of the Philippines (DBP) as the nation’s leading financial institution for development, the House of Representatives has passed House Bill No. 11230 on its second reading. The bill, which was approved during a plenary session on Monday via voice vote, aims to modernize the DBP’s charter to enhance its capacity to finance key sectors such as infrastructure, MSMEs, education, healthcare, housing, environmental protection, and other social services.
Spearheaded by House Speaker Martin Romualdez and Irwin Tieng, the chairperson of the House Committee on Banks and Financial Intermediaries, the legislation seeks to replace the outdated Executive Order 81 from 1986. The new charter is designed to empower the DBP with the tools necessary to increase its global competitiveness and financial sustainability.
Under the proposed changes, the DBP will function as a national development policy bank, focusing on implementing government policies related to priority financing areas, enhancing competition in financial markets, and promoting financial sector development to improve capital allocation and macroeconomic stability.
The bill also proposes a significant increase in the DBP’s authorized capital stock from PHP50 billion to PHP300 billion, with PHP32 billion to be subscribed and fully paid by the national government. DBP President and CEO Michael de Jesus has voiced strong support for these amendments, stressing the importance of increased capital to support the bank’s development initiatives.
De Jesus noted the necessity of the capital increase, stating, “We need to increase our capital. There’s no question. That’s why we’re working with the Congress now on the amendment to the DBP Charter.” The bill also allows the DBP to use its unrestricted earnings to boost the national government’s paid-up capital stock and permits government-owned and controlled corporations to invest in DBP shares.
Furthermore, the legislation includes provisions that would enable the DBP to raise funds from capital markets, with the government maintaining at least a 70% ownership stake, while opening opportunities for private sector or other government agencies to invest.
The Department of Finance has prioritized the new DBP charter and is seeking presidential certification to expedite its passage. Last September, the Senate passed a similar bill, Senate Bill 2804, known as the New DBP Act.