The Market Monitor Minding the Nation's Business
The Land Bank of the Philippines (LandBank) and the Development Bank of the Philippines (DBP) have demonstrated strong financial performance, putting them in a position to expand services and better support Filipinos, the Department of Finance (DOF) announced recently.
The DOF highlighted that both banks have consistently exceeded the Bangko Sentral ng Pilipinas (BSP) minimum capital adequacy ratio (CAR), a critical measure of financial stability. As of end-November 2024, LandBank reported a CAR of 16.42 percent, while DBP registered 14.78 percent, both well above the regulatory threshold of 10 percent.
“The solid financial footing of LandBank and DBP reaffirms their indispensable role in advancing the nation’s progress. This enables them to adhere to sound financial management practices and effectively deploy resources to support vital sectors such as infrastructure, agriculture, fisheries, and micro, small, and medium enterprises (MSMEs), among others,” said Finance Secretary Ralph Recto.
LandBank President and CEO Lynette Ortiz emphasized that the institution’s strong financial health and sustained revenue growth equip it to fulfill its mandate and contribute significantly to the government’s inclusive development goals. Similarly, DBP President and CEO Michael de Jesus assured the public of the bank’s financial strength and readiness to support President Ferdinand R. Marcos Jr.’s 10-point economic agenda while meeting the needs of its clients and stakeholders.
To further bolster the financial stability of these state-owned banks, the DOF is advocating amendments to their charters through Congressional approval. A central feature of these amendments is allowing LandBank and DBP to raise private capital by offering a portion of their shares to the public. Additionally, both banks propose increasing their authorized capital stock offerings.
The DOF also noted that the amendments to LandBank’s charter include provisions to streamline the bond issuance process, aligning it with that of DBP. This measure aims to enhance access to capital markets, reducing dependence on national government support or dividend relief, and ensuring the banks’ long-term sustainability.