STATE-RUN Development Bank of the Philippines (DBP) is targeting to grow this year its assets to P817 billion as it remains on track to hit its P1-trillion goal by 2022.
In a report to Finance Secretary Carlos G. Dominguez III, DBP President-Chief Executive Officer Emmanuel Herbosa said they aim to grow their assets by 7 percent this year to reach P817 billion, from P762.17 billion in 2019.
Herbosa said the DBP remains on track to achieve its P1-trillion asset goal, as it was able to expand its assets by 14 percent in 2019 compared to the 2018 level of P669.59 billion, or better than the 10-percent increase over the 2016-2018 period.
“We project an average growth in assets of 10 percent per year to meet our goal of P1 trillion by 2022,” Herbosa said.
At least 54 percent of DBP’s 2019 total assets of P762.17 billion, or P414.06 billion were in loans, consistent with its role as a development bank. The remaining percentage is composed of P205.56 billion for investments in treasuries and other ventures, while P141.55 billion were investments in other assets.
DBP is also aiming to book a higher net income this year to P6.1 billion, from P6.06 billion in 2019.
In terms of gross income, the state-run bank’s goal is to increase it by 5 percent to reach P35 billion. This is higher than the bank’s gross income of P32.87 billion in 2019, a 26-percent surge from P26.06 billion the previous year.
Herbosa said this is also higher than the average growth of 6.75 percent over the 2016-2018 period.
Loan portfolio
Aside from this, DBP also wants its loan portfolio to reach P419 billion this year, up from P414.06 in 2019.
Moreover, it aims to increase its deposits by 7 percent to P594 billion from P554.63 billion in 2019.
As of November 2019, P223.9 billion or 65 percent of the DBP’s total loan portfolio went to the infrastructure and logistics sector. The bank lent P58.9 billion to the agriculture sector, released P16.7 billion in salary loans, lent P43.7 billion to the environmental sector, and released P45.3 billion for other development loans.
Over 50 percent of countryside
“WE have exceeded our target of reaching 50 percent of the countryside, as we have already achieved 53-percent reach in 2019,” Herbosa said.
Compared to the top 10 universal and commercial banks like BDO Unibank, Metropolitan Bank and Trust Co. (Metrobank) and the Bank of the Philippine Islands, Herbosa said DBP’s loan portfolio growth was much higher at 26 percent compared to the industry average of 11.9 percent as of the third quarter of 2019. This feat was achieved despite the absence of consumer loan products, unlike most of the private universal and commercial banks.
DBP’s deposits, which grew 17 percent, was likewise better than the industry’s 5.7-percent growth rate last year; and its asset expansion of 14 percent was faster than the industry average of 11.57 percent, Herbosa said.
“Compared to the industry’s 1.14 percent, DBP’s return on assets ratio at 0.85 percent, and the industry’s return of equity of 10.6 percent compared to our 10.82 percent, show that DBP is mostly developmental lending. This is also reflected in our higher non-performing loan ratio of 2.37 percent as against the industry’s 1.88 percent. Thus, margins are not as high as the others and the Bank takes a little more risk,” Herbosa said.
“We will continue to help spur the development of micro, small and medium enterprises, assist the newly formed Bangsamoro Autonomous Region in Muslim Mindanao, as well as the rest of Mindanao, and forge partnerships in fintech [financial technology] to increase manpower productivity and the digitalization of our operations,” Herbosa added.