THE Duterte administration is eyeing the state-run Development Bank of the Philippines (DBP) to be an "infrastructure bank" to help effectively carry out the government's ambitious spending program that aims to close the country’s decades-old infrastructure gap, the Department of Finance (DOF) said.
Finance Secretary Carlos Dominguez III disclosed the plan during a recent meeting with the officials of Daiwa Securities Group, Inc., led by its president and chief executive officer Seiji Nakata, after the latter had informed him of Daiwa’s collaboration with the DBP on investment banking advisory services.
“We are very happy about your good experience with the DBP. We want to improve the DBP. Our plan is to make it the Philippines’ infrastructure bank,” Dominguez said. “The DBP, in my view, lost its way for a few years so we want to redirect it like the Development Bank of Japan (DBJ Inc.).”
DBJ Inc. pioneered project financing in Japan, specifically in the sectors of energy and infrastructure.
Daiwa and DBP established a joint venture, the DBP Daiwa Capital Markets Philippines, in 1995. As a result of this team-up, DBP and Daiwa later on expanded their collaboration to include investment banking advisory services.
The DBP currently supports the government’s infra program by assisting Public Private Partnership (PPP) projects at the national and local government levels.
The bank’s priority lending areas, aside from micro, small and medium enterprises, include infrastructure and logistics, social services, and protection of the environment.
It recently granted a P550-million term loan to the Camarines Sur provincial government to finance the province’s various infrastructure programs and has advised the Department of Transportation in the structuring, tendering and eventual award of the PPP contract for the P65 billion LRT 1 Extension, Operations and Maintenance Project.
Dominguez said that the DBP as an infra bank can help its clients raise funds for projects by tapping the capital markets “and that’s where Daiwa can help, in the capital market side.” (SDR /SunStar Philippines)