Department of Finance
MANILA, Philippines — The Department of Finance (DoF) urged Congress to speed up the approval of bills that would tweak the charters of the two state banks so they can finally go public and help replenish their capital following their hefty contributions to Maharlika Investment Corp. (MIC).
In a statement on Thursday, the DoF said it will continue advocating for congressional approval of amendments to the charters of the Land Bank of the Philippines (Landbank) and the Development Bank of the Philippines (DBP).
A key feature of these amendments is enabling the banks to access private capital by offering a portion of their shares to the public. Both banks are proposed to increase their authorized capital stock offering to the public.
“Additionally, the proposed amendments to Landbank’s charter include a provision to streamline the bond issuance process, similar to that of DBP,” the DoF explained.
“This change would allow the banks to access capital more efficiently, reducing their reliance on national government support or dividend relief,” it added.
The DoF issued the statement a few days after the International Monetary Fund (IMF) urged the government to swiftly restore the capital of Landbank and DBP and for the two lenders to protect local financial stability.
The IMF also said the state banks must exit regulatory relief as soon as possible to promote a level playing field for the rest of the domestic banking sector, which are required to maintain a certain level of capitalization.
Both Landbank and DBP hold significant shares in MIC, the start-up company managing the country’s nascent sovereign wealth fund. The banks had remitted to the Bureau of Treasury their combined P75-billion contribution, representing 60 percent of the P125-billion initial capitalization of MIC.
In the same statement, the DoF said Landbank and DBP still maintained their “strong financial position.”
“Both state banks have consistently met and exceeded the minimum requirements of the Bangko Sentral ng Pilipinas (BSP) for Capital Adequacy Ratio (CAR), which is a critical benchmark of financial health,” it said.