DBP TO SEEK REGULATORY, DIVIDEND RELIEF THIS YEAR
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TATE-RUN lender Development Bank of the Philippines will again seek regulatory and dividend relief to build up its capital after infusing billions into Maharlika Investment Corporation (MIC). On the sidelines of the 2025 Annual Reception for the Banking Community, DBP President Michael O. de Jesus told reporters the bank will request the Bangko Sentral ng Pilipinas (BSP) to extend its regulatory relief. “Even though [we] will meet all the capital ratios, we still would seek [regulatory relief] for comfort,” de Jesus said. The DBP will also seek dividend relief from Malacañang this year to augment its capital, according to de Jesus. This will allow DBP to declare and remit zero percent of its annual net
WORLD | A8
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earnings to the national government. To recall, the DBP and Land Bank of the Philippines (LandBank) contributed P25 billion and P50 billion, respectively, to the Bureau of the Treasury as seed capital of the MIC, the manager of the country’s first sovereign wealth fund. However, the move resulted in a reduction in the banks’ capital, which could make them noncompliant with the BSP’s capital requirements. The DBP and Lank Bank of the Philippines (LandBank) sought regulatory relief previously in 2023 so that their contribution would not be deducted from their capital.
No request from LandBank
ALSO at the BSP reception, LandBank
President and Chief Executive Officer Lynette V. Ortiz told reporters the bank will not seek a reprieve. “If you look at our financials, we have no need for it. This is despite the P32 billion of dividends that we remitted to the government just last year and the P50 billion to [the MIC],” Ortiz said. LandBank’s capital adequacy ratio (CAR), the measure of a bank’s financial health, stood at 16.42 percent while DBP’s level is at 14.78 percent as of the end of November 2024—both above the 10-percent regulatory threshold. Earlier, the International Monetary Fund (IMF) said DBP and LandBank must exit 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,” the IMF said. The IMF also prodded Philippine officials to restore the capitalization of the two state-owned banks after their investment in the MIC. De Jesus said DBP will be increasing its authorized capital to P300 billion from P35 billion to exceed the minimum capital requirement. “We’re working with the Congress now on the amendment to the DBP charter,” de Jesus said, adding that the Department of Finance will ask for presidential certification to expedite the passage of the amendments to the charter. Reine Juvierre S. Alberto
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DEBT SERVICE UP 65% ON INTEREST, WEAK PESO T By Reine Juvierre S. Alberto
HE national government’s debt service bill swelled by 65.33 percent to P93.704 billion in November 2024, as interest rates remained high amid weak peso performance.
Data from the Bureau of the Treasury (BTr) showed the government settled P93.704 billion of its debts in November 2024, higher by 65.33 percent than the P56.674 billion it paid a year ago. “The sharp year-on-year increase in the [government’s] debt servicing bill could be attributed to higher debt maturities, still relatively higher interest rates and weaker peso exchange rate,” Rizal Commercial Banking Corporation Chief Economist Michael L. Ricafort said. As such, interest payments increased by 37.29 percent to P66.653 billion in November 2024, up by 37.20 percent yearon-year from P48.548 billion. About P48.929 billion in interest was settled to domestic sources, 38.25 percent lower than the P35.257 billion shelled out last year. See “Debt,” A2
RICE PRICE A sari-sari store owner in Caloocan City measures retailed rice to sell to her customers. The Department of Agriculture has announced that the maximum suggested retail price (MSRP) for imported rice would be set at P58 per kilo beginning January 20. The DA also expanded the distribution network of its cheaper rice programs as part of efforts to counter “unreasonably high” retail prices of the staple. Under the Rice-for-All program, consumers can purchase rice at P45 per kilo for 5 percent broken grains, P40 for 25 percent broken, and P36 for 100 percent broken, or “Sulit Rice.” Related story in Agriculture page, A5. NONIE REYES
TAX BREAKS PITCHED TO LURE CRITICAL MINERALS INVESTORS By Cai U. Ordinario @caiordinario
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ISCAL incentives such as tax breaks can be a good tool to encourage greater investment in the mining and processing of critical minerals, according to the United Nations Department of Economic and Social Affairs (Undesa). In the report World Eco-
nomic Situation and Prospects 2025, Undesa said the mining and production of critical minerals can boost job generation and help countries attain the Sustainable Development Goals (SDGs). Undesa said fiscal incentives can include income tax holidays and tax breaks, accelerated depreciation, investSee “Tax,” A2
We’ll become UMIC in ’25, says Marcos
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RESIDENT Ferdinand Marcos said he is confident the country will retain the momentum of its economic growth and finally become an upper middle-income country this year. The chief executive made the remark in his toast remarks during the Vin D’Honneur, where he hosted members of the diplomatic corps in Malacañang on Saturday. “We are confident that the country will be able to hit this year the GNI [gross national income] per capita range set by the World Bank to reach upper middle-income coun-
try [UMIC] status, coming off from an all-time-high record registered in 2023 to the tune of USD4,335 or PHP241,165.00,” Marcos said. To sustain the country’s economic growth this year, he said the country will be attracting more foreign investments by accelerating infrastructure investments, enhancing the ease of doing business, and boosting national competitiveness. A country needs to achieve gross national income (GNI) per capita income range of $4,466 to $13,845 to be classified upper-middle income. The government was initially
targeting to achieve upper-middle income status in 2020, but the Philippine economy contracted from the strict quarantine measures during the pandemic. Marcos said the projects will be funded through an increase in government revenue collection, which reached P4.42 trillion last year—the highest in the last 27 years—and through prudent and transparent debt management. “Excellencies, ladies and gentlemen, early in my Presidency, I vowed to re-introduce the Philippines to the world and jumpstart meaning-
ful, concrete, and mutually beneficial partnerships that will drive growth for this country in the 21st century economy,” Marcos said. In his Vin D’Honneur speech, Marcos also reiterated his call for support for the country’s bid to obtain a non-permanent seat in the United Nations Security Council (UNSC) for the term of 2027-2028. He also gave updates on the efforts of his administration to strengthen its diplomatic ties with the opening of four more Foreign See “UMIC,” A2
PESO EXCHANGE RATES n US 58.5090 n JAPAN 0.3700 n UK 72.0246 n HK 7.5180 n CHINA 7.9797 n SINGAPORE 42.7885 n AUSTRALIA 36.2346 n EU 60.2701 n KOREA 0.0401 n SAUDI ARABIA 15.5853 Source: BSP (January 10, 2025)