DBP forecasts 40% growth in net profit

The Development Bank of the Philippines (DBP) is hoping to increase by at least 40 percent its net income this year to P2 billion from P1.46 billion in 1999, DBP president and chief executive officer Remedios L. Macalingcag said yesterday.

"The bank’s income may even be revised upwards as it expects to give out more loans this year," Macalingcag said.

She expressed confidence that the DBP would also be able to improve its non-performing loans ratio this year or at least keep it to its 1999 level of 6.42 percent.

Macalingcag vowed that the DBP will continue to pursue its development mandate by pushing program-type funds to priority sectors and industries that are critical in fostering economic growth particularly in the countryside.

Among them, Macalingcag said, are small and medium enterprises (SMEs), housing, local government units (LGUs), and strategic industries such as power, telecommunications, transportation, environment and utilities.

The DBP head said that the bank has about P71 billion to support development projects and activities. The funds are available, she said, through the wholesale and retail lending windows of the bank.

Macalingcag said the DBP will take the lead in the formation of a secondary mortgage institution (SMI) in partnership with the private sector and the business community given its expertise, credibility, and financial strength.

The DBP, Macalingcag said will tap official development assistance to provide the seed fund to bankroll the creation of the SMI and thus promote the growth of new financial instruments and help in the development of the capital market.

The DBP is currently negotiating two loan packages with the Japan Bank for International Cooperation (JBIC) as well as other loan packages with the World Bank, the German KFW and the Nordic Investment Bank.

Macalingcag said one of the DBP’s priority sectors is the development of small and medium scale enterprises.