THE DEVELOPMENT BANK of the Philippines (DBP) is hoping to refile within this year the bill replacing its decades-old charter to increase its capital stock.
“It was vetoed, so we will have it refiled. But the most important part of the charter is the increase in the authorized capitalization from P35 billion to P300 billion,” DBP President and Chief Executive Officer Michael O. de Jesus told reporters on the sidelines of an event on Thursday.
The new bill to be filed will address the issues that led to the veto, he said.
“We will just have to address (them) to make sure that it won’t be vetoed again. There were actually very minor issues that really did not affect the main part of the bill. But whatever it is, we will address those in the refiling.”
Asked when the proposal will be filed, the official said: “Maybe within the year. Maybe towards the end of this year. We will work on it.”
The Finance department has pushed for the amendments to DBP’s charter to strengthen its financial position and give it easier access to the capital markets. The proposal approved by the 19th Congress sought to increase the state-run lender’s capital stock to help finance its priority sectors, such as social infrastructure and small businesses.
The bill would have also paved the way for DBP’s listing as it would have allowed the bank to offer up to 30% of its shares to the public, with the National Government mandated to own 70% of its capital stock at all times.
President Ferdinand R. Marcos, Jr. in May vetoed the bill “due to certain provisions that are either vague or confusing, or conflicting with the Constitution, existing laws, and principles of good governance,” he said in his veto letter to Congress.
Mr. Marcos said in his veto letter that the bill’s provision allowing DBP to temporarily appoint directors in its subsidiaries undermines the authority of the Executive over government-owned or -controlled corporations (GOCC) and the standards of accountability and oversight under the GOCC Governance Act. A provision that allows shareholders to vote for the bank’s board members also goes against another provision that authorizes the President to do the same.
He added that the authority granted to DBP to receive dividends from its subsidiaries contradicts the law that requires all GOCCs to remit at least 50% of their annual net earnings to the National Government.
Mr. De Jesus said these issues could have been resolved “easily,” but they did not have the time as the 19th Congress was about to close when the bill was vetoed.
“We’re just waiting for the completion of the committee assignments in the Senate and in the House. So, maybe once they’re completed, we can write a refile with the Department of Finance’s guidance,” he said.
Meanwhile, DBP on Thursday signed a memorandum of agreement with the Department of Education to launch the DBP Integrated Scholastic Program for Inclusive and Responsive Education (INSPIRE), a five-year omnibus assistance program for the education sector.
The bank will be allocating P510 million to support both the basic and higher education sectors.
For the higher education sector, P437.5 million will be allocated for tuition and miscellaneous fees and student support for five batches of scholars, while P87.5 million will benefit at least 350 scholars for each batch.
For the basic education sector, P72.5 million will be used to support up to 150 public schools in five years, while P14.5 million will be used yearly to assist 20 public elementary schools and 10 public secondary schools.
“I am proud to share that we also have approved a grant amounting to P87 million for the first tranche of the INSPIRE scholastic component. Under this, the program can aptly support the tertiary education sector by providing funding resources to the first batch of DBP INSPIRE scholars, or up to 460 individuals, whose four-year course programs shall be covered under the program,” Mr. De Jesus said.
DBP’s net income stood at P2.53 billion as of end-June, its financial statement posted on its website showed. — A.M.C. Sy
