DBP reports P1.03-B net profit for '99

The Development Bank of the Philippines (DBP) reported, yesterday a net income of P1.03 billion for 1999 which, according to DBP president Remedios Macalingcag, could have been higher were it not for its loan-loss provisioning of P1.2 billion.

Macalingcag said the DBP is supposed to declare 30 percent of its net income as dividend to the National Government as mandated by law.

She said if the DBP gives the mandated 30 percent dividend to the National Government, the bank will not have enough funds left to build up its capital.

Therefore, Macalingcag said she would reiterate an earlier request made to former Finance Secretary Edgardo B. Espiritu and which she will now direct to Finance Secretary Jose T. Pardo asking for a complete exemption from the required dividend declaration to enable the DBP to plow back its earnings for its further capital build up.

The government has not allocated any funds for DBP's capital build-up under the 2000 General Appropriations Act.

Just like all other banks, Macalingcag pointed out that DBP has to increase its capital if it wants to remain competitive. Without any additional capital infusion from the government, DBP must build up its capital from its own earnings.

However, if the government is adamant about getting its dividend, Macalingcag said it could perhaps cut the mandated dividend to just 10 percent which is the same amount mandated of the Land Bank of the Philippines, another government financial institutions.

DBP's non-performing loan (NPL) level of 5.4 percent as of December 1999, was quite low compared to the industry average. It's NPL stood at just 5.4 percent.

For this year, Macalingcag said the DBP is aiming for a net income (after loan-loss provisioning) of P1.2 billion.

She also reported that for this year, the DBP has about P85 billion for re-lending to development projects and activities.