THE Department of Finance (DoF) said it is pushing for Congressional approval of the new charters of state-run banks Land Bank of the Philippines (LANDBANK) and the Development Bank of the Philippines (DBP).

“To further strengthen the financial standing of state banks, the DoF is advocating for Congressional approval of amendments to the charters of LANDBANK and DBP,” it said in a statement on Thursday.

The DoF also said the changes will allow the banks to “access capital more efficiently, reducing their reliance on National Government support or dividend relief.”

House Bill No. 11230, which seeks to amend the DBP’s charter, was approved by the House banks panel in November 2019; proposals seeking to revise LANDBANK’s charter remain stuck in that committee.

The LANDBANK bills propose to increase its capitalization to P1 trillion from the current P200 billion.

Meanwhile, legislation on DBP’s new charter hurdled the Senate in September.

Senate Bill No. 2839 proposed to increase the bank’s authorized capital stock to P300 billion from P35 billion.

The International Monetary Fund (IMF) has called for the restoration of capital to the government banks after they contributed to the startup funding of the Maharlika Investment Corp. (MIC).

The IMF noted the importance of returning startup capital and exiting regulatory relief “as soon as possible.”

“While the establishment of the MIC can help address the country’s investment needs, it should not come at the cost of a resilient financial system, sound regulatory framework, and level playing field,” it said in a report.

LANDBANK and DBP had contributed P50 billion and P25 billion respectively to the sovereign wealth fund.

Asked for comment, Rafael D. Consing, president and chief executive officer (CEO) of MIC said: “I concur with them.”

“The reality, however, is that LANDBANK (capital ratios) actually meet the minimum regulatory requirements. But all the Philippine banks do,” Mr. Consing told BusinessWorld.

He said most banks are compliant with the 10% capital adequacy ratio (CAR) standard set by the Bank of International Settlements.

At the end of November, LANDBANK’s CAR remains at a healthy level of 16.42% while DBP is at 14.78%, the DoF said in the statement.

“The solid financial footing of LANDBANK and DBP reaffirms their indispensable role in advancing the nation’s progress,” Finance Secretary Ralph G. Recto said in the statement.

Mr. Recto said this enables the banks to “continuously adhere to prudent financial management practices, utilize their resources to support Filipinos and sectors such as infrastructure; agriculture; fisheries; micro, small and medium enterprises.

“Our robust financial health and consistent revenue growth empower us to fulfill our mandate, serving as a dependable partner in the National Government’s inclusive development agenda,” LANDBANK President and CEO Lynette V. Ortiz said in the statement.

Meanwhile, DBP President and CEO Michael O. de Jesus said its bank “remains financially strong and more than capable of supporting” the President’s 10-point economic agency while following its mandate and servicing clients and stakeholders. — Aubrey Rose A. Inosante