DBP net income up 71% to P1.54B

Government-run Development Bank of the Philippines (DBP) reported yesterday that its net income after tax increased by 71 percent to P1.54 billion for the first six months of 2005 from P900 million in the same period last year.

DBP president and chief executive officer Reynaldo G. David said the bank’s latest net earnings surpassed by 170 percent the target for the semester.

"DBP continued to perform the delicate balancing act of accomplishing its development mandate while maintaining its financial stability. The first half of year 2005 attested to the resiliency and strength of the bank; we posted a substantial increase in income despite rather more difficult circumstances compared to the previous year," David said.

The bank’s gross income reached a high of P7.83 billion, improving on the P6.62 billion it registered as of June last year. Net income before loan loss provisioning stood at P2.207 billion.

David said bank turned in a gross loan portfolio of P95.72 billion, significantly higher than the P80.14 billion recorded in June 2004. The bank’s past due ratio stood at 9.36 percent as against the industry average of 12.91 percent.

Total assets also increased from P158.68 billion in the same period last year to P180.49 billion, while borrowings stood at P109.04 billion.

The bank president also reported on the status of DBP’s priority programs which include the Sustainable Logistics Development Program (SLDP) and various projects and activities for the environment and small and medium enterprise sectors.

Launched in support of the government’s Strong Republic Nautical Highway project, the SLDP is an investment financing facility for a comprehensive and integrated transport system, as well as related infrastructure and support services.

The program primarily seeks to improve the country’s basic infrastructure for the efficient movement of basic commodities and to bring down the cost of goods, through the introduction of a modern storage handling and transport system under proper quality control management

Summarizing its involvement in the SLDP, David announced that DBP has budgeted P6.292 billion involving 230 accounts that are either approved, in the pipeline, and/or are prospects. These accounts involve initiatives in the Road Roll-on Roll-off Terminal System (RRTS), grains highway and cold chain highway.

To date, total funds available for SLDP projects amount to P12.66 billion.

For the environment sector, David announced that DBP has credit facilities, amounting to P6 billion, for water and power projects, particularly new and renewable energy, solid waste, and industrial pollution control. Under its Environmental Infrastructure and Support Credit Program and Industrial Pollution Control Loan Program, the Bank has extended credit support to various environmental projects. These include a P125-million loan for a solid waste containerization project in Puerto Princesa City; P130 million for printing equipment with features that enable reduction of plastic waste and product rejects; P78 million for a closed loop water recycling system in Leyte; and P410 million for installation of equipment to reduce dust emission and fuel consumption.

David also underscored the bank’s latest environmental initiative, the DBP Forest Program that seeks to support and to encourage the forestation of open and denuded areas through the planting of relatively high value fruit trees and other useful plant species.

The program was launched on April 22 in Abucay, Bataan with the reforestation of a 20-hectare mangrove area in Barangay Mabatang. The second DBP Forest project was recently undertaken involving the forestation of 100 hectares upland area within the Calminda Watershed in Barangay Paraiso, Alabel, Sarangani province.

He said there is an estimated 25,000 hectares being applied for forestation under the DBP Forest Program: 6,124 hectares in Northern Luzon; 5,639 hectares in Southern Luzon; 8,024 hectares in Visayas; 5,367 hectares in Mindanao.

For the SME sector, David said that the bank has turned over initial funding support to jumpstart the operations of business assistance centers in DBP partner educational institutions under the Sustainable Partnership for Energizing Entrepreneurship Development (SPEED) program. These educational institutions are: Aklan State University, Benguet State University, Camarines Sur State Agricultural College, Central Philippine University, Foundation University, Mariano Marcos State University, Pampanga Agricultural College.

He also announced DBP’s latest undertaking, the SMC Assembler Financing Program that aims to generate economic activities in the countryside by promoting the "Big Brother – Small Brother" development strategy. Launched in partnership with San Miguel Corp, the program will help SMC-accredited assemblers/consolidators and farmer-beneficiaries grow their businesses by facilitating their access to a range of support services from DBP. The bank will extend technical assistance and loans to qualified program beneficiaries for their post harvest facilities and working capital requirements.