For 2003, DBP president Simon R. Paterno said they do not expect to post a dramatic increase in net income. "External conditions are unpredictable, including threats of international," he said, adding that lending would be their priority instead of making huge profits.
DBP’s past due ratio stood at a comfortable 13 percent versus the banking system’s average of roughly 20 percent.
However, bank officials said they expect this to increase dramatically with their aggressive lending programs in the next two years. "NPLs (non-performing loans) will go up," Paterno admitted.
The DBP has also formed an asset management group tasked to manage and sell both existing and anticipated bad debts and assets.
The bank has a total loan portfolio of over P70 billion consisting of loans issued to small and medium enterprises (SME) and major infrastructure programs like transportation and power under its Sustainable Logistics Development Program (SLDP). Of the total amount, the bank expects to set aside P35 billion for the SME sector.
The SLDP has a funding pool of P20 billion, which can be sourced from official development assistance (ODA) funds as well as internally-generated funds. The bulk of the ODA funds comes from the Japan Bank for International Cooperation (JBIC).
The P1-billion dividend was the biggest ever turned over by DBP to the National Government. Previous dividends issued by the bank were P756 million in 2001 and P520 million in 2000.I
Finance Secretary Jose Isidro Camacho said the dividend would reflect in its January to March 2003 earnings even if the amount covers the 2002 period. "We are operating on a quarterly basis," Camacho, who received the P1-billion manager’s check, said.
Government financial institutions (GFIs) have over the past three years been asking the Department of Finance (DOF) for a lower dividend. Under the law, GFIs are expected to declare a dividend equivalent to 50 percent of their net income.
The finance department has rejected this request.