DBP allots P46B for lending this year

The Development Bank of the Philippines (DBP) will make available P46 billion in loanable funds this year, the state-run bank’s top executive said.

“We are looking for the right projects. And we are looking for the right partners,” Reynaldo G. David, DBP president and chief executive officer said during the annual convention of the Confederation of Central Luzon Rural Banks Inc. (CCLRB) yesterday.

He said the priority focus of the loans are in infrastructure, social services, environment and enterprise development activities.

David said most of the priority areas are where the rural banks are located or have a strong presence, and cannot be adequately serviced by the commercial banks.

“Given your strength in the countryside, in particular the sheer numbers of your outlets, coupled with your evolving technologies in the provision of small loans to micro SMEs, there is much potential for a renewed partnership with DBP for the effective delivery of countryside credit,” David told the CCLRB members.

“Rural banks can assist in identifying the right projects and eligible borrowers. Rural banks may also be the originators of the loans and in turn sell its portfolio to DBP. Alternatively, rural banks can be our collecting agents in areas where there are no DBP branches, or our conduit partner in financing large projects.”

Last year, the government financial institution extended to infrastructure and logistics programs a total of P23.23 billion in loans. The micro, small and medium enterprises (MSME) sector cornered P15.2 billion, social services (P6.52 billion) and environment (P3.84 billion).

Other sectors that also tapped DBP funds were manufacturing, construction, wholesale and retail trade, agriculture, fishing, hotels and restaurants, and mining and quarrying.

Aside from development loans, the DBP also has a wholesale lending window for rural banks. The lending window was developed not just to complement the growth of rural banking but also in recognition of the role of rural banks in microfinance.

David likewise revealed that the DBP is exploring the viability of a long-term facility that will allow rural banks to make use of second-generation funds, much like an ODA-type of funding facility. This program-type approach requires rural banks to propose a consolidated funding program. For example, with the establishment of a feed mill in an area, a rural bank can propose a financing scheme for cassava suppliers, consolidating several small farmers under a contract-growing program.

 The DBP also encouraged rural banks to look into programs in new and renewable energy, water supply, waste management and reforestation.

 The Rural Power Project, funded by the World Bank, makes available to rural banks access funds for relending, purposely for the acquisition of stand alone, renewable energy systems for decentralized electrification, specifically solar home systems

“Rural banks can also assist in bringing suitable remote energy technologies in the countryside. We have funds for renewable energy sources such as solar power and bio-digesters for rural households,” David said.