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Responsive Banking Redefined for Countrywide Pandemic Recovery


State-owned Development Bank of the Philippines (DBP) marks its 74th anniversary with a redefined approach towards responsive banking, providing viable and sustainable support to both government and industry as the country steadily strides forward on the path to economic recovery.

Alongside the National Government in the fight against the pandemic, DBP ensured the availability and accessibility of its financial services nationwide particularly for adversely-hit industries like construction, manufacturing, health care, education, transport and storage, among others.

The bank ramped up its Rehabilitation Support Program on Severe Events (DBP RESPONSE) to extend much-needed financing support for the rehabilitation efforts of both public and private institutions adversely affected by the pandemic. Under the program, a longer repayment period of up to 15 years, inclusive of a three-year grace period, is granted to public borrowers and up to 10 years with a three-year grace period for private institutions. Current DBP borrowers, on the other hand, may request for the deferment of collection of loan repayment of up to six months, with option for restructuring in case a borrower is not able to recover within six months.

Under the DBP RESPONSE, as of November 2020, loan payment moratorium was extended to 726 borrower-accounts with outstanding principal balance of P134.94-Billion, or a deferred amount of P21.04-Billion combined principal and interest. Twenty-five borrowers were granted loan approval for new projects in the cumulative amount of P6.12-Billion, while 16 borrowers were granted loan restructuring amounting to P1.94-Billion.

The bank continued processing and approving applications for loans.  As of December 2020, loan releases for 1,222 enterprises, in the amount of P228.04-Billion, were processed. While DBP continued the processing of loan releases for supported industries and enterprises, it also sustained the processing of remittances and other financial transactions to ensure the continuous flow of goods in the country.

DBP has likewise implemented the interest rate subsidy program covering loans for local government units (LGUs) that will be utilized for economic and social development programs. DBP, along with Land Bank of the Philippines, have allotted P1-Billion each to provide subsidies on interest payments on new and existing loans of LGUs as they implement recovery and rebuilding efforts.

Under the program, the interest subsidy would be offered to new and existing borrowers of DBP’s Assistance for Economic and Social Development (ASENSO) for Local Government Units (LGUs) Financing Program which covers initiatives on market infrastructure development and improvement, social welfare, health care, and other public infrastructure projects that spur local economic activity.

For its clientele in the South, DBP introduced its Mindanao Development Assistance Financing Program and the DBP RESPONSE – MSME Recovery Program to extend focused assistance to key constituencies.

Multi-channel fund disbursements

In a time of crisis, when government intervention was most needed by Filipinos especially in the countryside, DBP leveraged the use of technology and its network of partners to deliver innovative financial services responsive to the requirements of other national government agencies. The bank adopted a multi-channel platform for its multiple bulk disbursement undertakings to ensure faster, safer, and more convenient fund distribution to beneficiaries.

DBP facilitated the release of social amelioration funds to over three million marginalized workers affected by the national health emergency under the Department of Finance’s Small Business Wage Subsidy program. The bank also used this large-scale distribution approach in releasing more than P1.485-Billion in cash assistance to about 297,000 small-scale farmers under the Department of Agriculture’s (DA) Rice Farmers Financial Assistance program to boost agricultural productivity as well as alleviate the plight of farmers. DBP has since signed an agreement with DA for the distribution of P3,000 each in cash subsidies to around 900,000 marginal farmers through an e-voucher system under the Cash and Food Subsidy to Marginal Farmers and Fishers program.

Designated as financial intermediary in the pension disbursements of the Social Security System (SSS), DBP utilized digital banking to expedite the crediting of monthly pensions to pensioners’ accounts and eliminate disbursements through checks. Starting October 2020, SSS regular pensions have been released through DBP’s disbursement facility via the Philippine Electronic Fund Transfer System and Operations Network (PESONet) and DBP-accredited Remittance Transfer Companies (RTCs)/ Cash Payout Outlets (CPOs). Through these disbursement platforms, pensioners may opt to receive their monthly pensions through their accounts in any PESONet participating bank and e-wallet such as PayMaya or cash pick-up arrangement via DBP Cash Padala thru M Lhuillier.

Peso-denominated bonds issuance

Aligned with its sustainable development goals and to allow the bank to reach a wider network of stakeholders especially in the countryside, DBP raised P21-Billion from its second issuance of Peso-denominated Bonds from its P50-Billion Bond Program.

Proceeds from this fund-raising activity have been earmarked for renewable energy projects, green buildings, clean transportation, energy efficiency, pollution prevention and control, and climate change adaption projects, among others, under the bank’s Sustainable Financing Framework, as well as for other projects in line with the bank’s mandate.

Other eligible projects include affordable basic infrastructure and houses; initiatives that promote access to essential services; employment generation; food security; and socio-economic advancement and empowerment.

DBP’s maiden issuance of Peso-denominated Bonds in 2019, amounting to P18.125-Billion, also won as Best Sustainability Bond – Financial Institution in The Asset Country Awards 2020 presented by Hong Kong-based financial publication The Asset. Proceeds from this activity bankrolled projects on the environment and financial inclusion.

With a branch network of 129 branches including 11 branch units, 30 lending units, and 836 ATMs nationwide, DBP‘s post-pandemic interventions will continue to be carried out through innovative programs supportive of recovery and expansion as well as new investments to stimulate economic activity. In sustaining its development lending mandate, DBP will broaden and enhance its credit programs to further ease access to funds and promote an environment ripe for development intervention in hard-to-reach segments and areas.  These programs are expected to channel growth in the four priority thrusts of the bank, which are infrastructure and logistics, environment, social services, and micro, small and medium enterprises.

Redefining responsive banking, DBP continues with its drive to promote economic inclusion to remain a relevant and responsive partner of the National Government in promoting sustainable development, particularly in the countryside.

Click here for the DBP Anniversary Supplement