DBP to get $250M from JBIC for large industries

The Development Bank of the Philippines (DBP) expects to get some $250 million from the Japan Bank for International Cooperation (JBIC) by the end of the year for relending to large industries, primarily those engaged in manufacturing and infrastructure, development.

Bank officials said the funds would be released by the end of the year and would support DBP’s existing lending facility for key industries, mainly large projects that commercial banks consider too risky under the present economic situation.

DBP chairman Vitaliano Nañagas said the JBIC facility would also supplement existing lending programs for small and medium enterprises (SMEs) which he said has been expanded to include not just project financing but technical assistance and project development as well.

He said DBP has identified the priority industries that would be the primary beneficiaries of the facility. Aside from manufacturing and infrastructure, he said DBP would also be open to projects in agro-processing, information technology and even hospital development.

"At present, there is an understandable resistance against funding large projects," Nañagas said. "But we are a development bank and this means we have to consider funding areas that commercial banks are usually not willing to consider."

DBP, according to Nañagas, has also expanded its microfinancing where about P200 million were available for lending to thrift banks, people’s organizations and non-government organizations.

DBP’s SME funds show stands at P13 billion and is likely to be expanded when the JBIC fund is released for relending to selected industries.

DBP, however, is still awaiting the government’s decision on its proposal to increase its capital after the bank reported a P1.2-billion net income for the first nine months of the year, higher than the P766 million pesos it recorded over the same period last year.

DBP’s SME funds now stands at P13 billion and is likely to be expanded when the JBIC fund is released for relending to selected industries.

DBP, however, is still awaiting the government’s decision on its proposal to increase its capital after the bank reported a P1.2-billion net income for the first nine months of the year, higher than the P766 million pesos it recorded over the same period last year.

DBP has asked the government to allow it to retain its earnings to enable it to increase its capital base and expand its lending operations. DBP presently remits 50 percent of its net income to the national treasury.

DBP recently secured approval to remit only 25 percent of its total net income to the National Government, but Nañagas said this reduction would not be enough to support its capital infusion plan.