DBP net income down 6.45% in H1

MANILA, Philippines — State-run Development Bank of the Philippines (DBP) saw a 6.45 percent decline in its net income in the first half of the year as it increased its provisions for bad loans amid the coronavirus pandemic.

In a statement, DBP executive vice president for corporate services and concurrent head of operations Marietta Fondevilla said the bank’s net income in the first semester reached P2.9 billion, down from the P3.1 billion recorded in the same period last year.

Fondevilla said the decline could mainly be attributed to higher provisions for potential credit losses due to the impact of the COVID-19 health crisis.

The government’s designated infrastructure bank booked total revenues amounting to P16.53 billion, four percent higher than the P15.91 billion recorded in 2019.

“Notwithstanding the various congressional initiatives to strengthen DBP’s financial position, the bank will continue to maximize and re-allocate its resources to fund initiatives with optimal development impact, while ensuring DBP’s viability during these challenging times,” Fondevilla said.

DBP data showed that the bank continued to boost its financial support to strategic sectors, with its loan portfolio growing by 15.6 percent to P364.4 billion in the first half from P315.13 billion a year ago.

The bank’s president and chief executive officer Emmanuel Herbosa said the increase was due to its aggressive lending activities nationwide despite the challenges posed by the pandemic during the second quarter of the year.

He said P165.3 billion of the total loans went to the infrastructure and logistics sector, followed by loans to social services at P77.1 billion, environment projects at P43.6 billion, and micro, small, and medium enterprises at P29.6 billion.

According to the DBP chief, the provision of development financing to business and industry remains crucial for the bank as the country gradually recovers from the effects of the current global health crisis.

“As the premiere infrastructure bank of the country, DBP will continue to streamline its lending programs to be more responsive to the funding needs of priority economic sectors, in support of the government’s recovery initiatives given the adverse impact of the pandemic,” Herbosa said.

He cited the bank’s Rehabilitation Support Program on Severe Events (RESPONSE), with four borrowers securing P429 billion in loans in the first half to help them mitigate the impact of the pandemic.

Meanwhile, Herbosa also reported that the bank’s total deposits grew by more than 37 percent as of end-June this year to P637.11 billion from P463.83 billion in the same period in 2019.

He said this is a result of the marketing and financial inclusion initiatives undertaken by DBP’s expanded branch network of 129 branches and 11 branch-lite units nationwide.

“During the second quarter of the year, DBP’s total assets also grew by more than 25 percent to P835.81 billion from P667.91 billion during the same period last year, bringing us closer to our goal of becoming a one trillion-peso bank by 2022,” Herbosa said.