MANILA, Philippines – The Department of Finance (DOF) remains keen on converting the Development Bank of the Philippines (DBP) into the country’s infrastructure bank and is eyeing to start its transition before the end of 2017.
In an interview, Finance Secretary Carlos Dominguez III said he wants the DBP to shift its focus towards financing infrastructure development in the country in line with the Duterte administration’s priorities.
“I’d like to do it before the end of this year. The DBP is like a big ship. It’s going a certain way, so you don’t just turn the ship right away. You have to make sure you know the direction, that the staff is fully trained for that, etc.,” Dominguez said.
In an earlier statement, the finance chief revealed his plan to reorient the DBP into an infrastructure bank, much like the Development Bank of Japan (DBJ) Inc.
Dominguez said he has directed DBP chairman Alberto Romulo and president Cecilia Borromeo to study how the bank would go about the transition.
“Japan has its own infrastructure bank, so I said, you (DBP) may better do discussions with the Japanese infrastructure bank to see how you can pattern your operations with theirs,” he said.
Another plan, according to Dominguez, is to transfer the operations of the DOF’s Municipal Development Fund Office (MDFO) to the DBP to jumpstart its move towards being an infrastructure bank.
“We have a fund here which is the Municipal Development Fund, but essentially its infra. It funds market places, small irrigation system, buildings for the municipalities. We would like to transfer the processing of that to the DBP so that will further enhance DBP’s move towards being an infrastructure bank,” he said.
Earlier, Finance Undersecretary Gil Beltran said the DOF is set to outsource the operations of the MDFO to the DBP which has better capacity to process loans to local government units.
Dominguez said the move to convert the DBP into an organization that focuses on financing infrastructure would not need a change in the bank’s name or charter.
“There’s no need. It’s just really to say that this is going to be the major thrust of the bank’s financing,” he said.
He also said the DBP would study if it would need additional capital for the transition.
The Duterte administration is planning to embark on a massive infrastructure program over the medium term to sustain economic growth, create jobs and reduce poverty.