THE House of Representatives on Monday approved on third and final reading a bill increasing the authorized capital of the Development Bank of the Philippines (DBP) to P100 billion from the current P35 billion.
Voting 219 affirmative, 6 negative with 0 abstention, lawmakers approved on third and final reading House Bill (HB) 9556 providing a new charter of the DBP. It repeals Executive Order 81 or the 1986 revised charter of the DBP, as amended.
The bill or the proposed “New DBP Act” increases the authorized capital of DBP to P100 billion divided into one billion common shares, to be fully subscribed by the national government. It stipulates that any further increase in authorized capital stock shall bear the approval of the Chief Executive upon the recommendation of the bank’s board of directors and the concurrence of the Secretary of Finance.
The bill also exempts DBP from capital charges on loans to government borrowers such as the national government, line agencies with no separate legal personality, government-owned and controlled corporations and their subsidiaries or affiliates, government financial institutions, government instrumentalities with corporate powers, and local government units. Earlier, DBP President and CEO Emmanuel G. Herbosa told lawmakers that amending the DBP’s charter will strengthen the bank’s primary objective as a premier government development financial institution while provide stiffer penalties to violations of the charter.
Moreover, the bill also enhances the authority of DBP to engage in traditional and non-traditional modes of financing business such as financial leasing of properties, and to exercise other powers provided under Republic Act (RA) 11232, or the Revised Corporation Code of the Philippines, including the power to acquire or establish subsidiaries and to enter into joint venture agreements for purposes of developing or disposing acquired assets without need of approval from the National Economic and Development Authority.
Also, the measure grants to DBP the power to carry on the business of a universal bank pursuant to RA 8791, or the General Banking Law 2000.
It also authorizes DBP to act as administrator of loan or credit facility programs for loans granted by the national government.
HB 9556 grants DBP perpetual corporate existence pursuant to the Revised Corporation Code of the Philippines.
Lastly, the bill enhances the provisions on avoidance of conflict of interest and ensures good corporate governance by providing for the inhibition of board members, officers and their relatives to the fourth civil degree of consanguinity or affinity in related party transactions.