State banks poised for expanded services, says DOF

The Department of Finance (DOF) reaffirmed the strong financial positions of the Land Bank of the Philippines (LandBank) and the Development Bank of the Philippines (DBP), underscoring their capacity to expand services for Filipinos across various sectors.

In a statement on Thursday, the DOF highlighted that both banks have consistently maintained capital adequacy ratios (CAR) exceeding the Bangko Sentral ng Pilipinas' (BSP) minimum regulatory requirement of 10%. As of November 2024, LandBank's CAR stood at 16.42%, while DBP’s CAR was at 14.78%.

Finance Secretary Ralph Recto lauded the banks' solid financial footing, emphasizing their critical role in driving national development. “The robust positions of LandBank and DBP enable them to adhere to prudent financial management and effectively channel resources into vital sectors such as infrastructure, agriculture, fisheries, and micro, small, and medium enterprises,” Recto said.

LandBank President and CEO Lynette Ortiz echoed this sentiment, noting that the institution’s strong financial health and consistent revenue growth allow it to support the government’s inclusive development agenda effectively.

Similarly, DBP President and CEO Michael de Jesus assured the public of DBP's financial strength, reiterating the bank's commitment to advancing President Ferdinand R. Marcos Jr.’s 10-point economic agenda while serving the needs of its stakeholders.

Proposed Charter Amendments to Enhance Capitalization
To further reinforce the financial stability of state banks, the DOF is advocating amendments to the charters of LandBank and DBP. These proposals include provisions to allow the banks to access private capital by offering a portion of their shares to the public, thereby increasing their authorized capital stock.

For LandBank, the proposed changes also include streamlining its bond issuance process to align with DBP’s existing framework. This adjustment aims to provide the banks with more efficient access to capital, reducing their reliance on national government support or dividend relief.

The DOF emphasized that these amendments would enable both banks to remain agile and responsive to the evolving financial needs of Filipinos while reinforcing their roles as pillars of the government’s development initiatives.

LandBank and DBP are expected to leverage their strengthened financial foundations to expand their reach and deliver enhanced support to critical sectors, paving the way for sustainable growth and development across the country.