Full year net income target is seen at P1.85 billion, or just 2.7 percent higher than the P1.84 billion realized in 2002.
In 2002, the bank recorded a income of P1.46 billion.
The bank also expects to declare a lower dividend for this year compared to last years level. In 2002, the DBP issued a P1-billion check to the national government as its dividend for that period.
The amount represented the mandatory 50-percent dividend on the banks net income for 2002.
DBP president and chief executive officer Simon R. Paterno said they would not be issuing a check of that similar magnitude as the bank would be increasing its provisioning for losses and brace itself for poorer bank activities due to the weak economic forecast for the year.
"We will be negotiating with the finance department about that," he added. "We had done our part last year but we have responsibilities to our stakeholders, depositors and small borrowers."
Paterno explained that the modest growth targets were based on forecasts of lower treasury performance, continued provisioning for loan losses, weaker loan activities aggravated by the controversial VAT, and the poor economic conditions burdened by the dreaded SARS.
Similar to most commercial banks, forecast earnings from treasury gains were set lower than the gains recorded in 2002 due mainly to the huge drop in interest rates.
The government financial institution (GFI) has also been putting in huge provisioning for losses, which accounts for the lower net income projections.
For the first three months of the year alone, DBP placed in loan loss provisioning of P367 million on the gross income of roughly P848 million. This resulted in a first quarter net income of P474.17 million.
For the whole of 2002, provisioning for losses reached P2.5 billion which is the considered one of the highest made by the government-run financial institution.
"This year, we will make lower but almost the same level (of loan loss provisioning) of last year," Paterno said. "We will not over-reach ourselves in terms of loans this year and end up carrying huge bad debts two to three years down the road," he added.
Meanwhile, total loan portfolio reached P82.92 billion of which P44 billion was allocated for retail lending and another P38.8 billion for wholesale. Loan approvals so far reached P1.7 billion covering 1,244 beneficiaries.
Bank officials forecast weaker borrowings in the next three quarters due to poor economic conditions resulting in low borrowings.
Loan approvals in the first three months reached P1.7 billion affecting 1,244 beneficiaries from microfinance to large enterprises.