BIZ BUZZ: DBP Cha-cha vetoed

It would have lapsed into law, but at the 11th hour, the law amending the charter of the Development Bank of the Philippines was vetoed by President Marcos, Biz Buzz sources confirmed.

The proposed DBP Act— which would have been the first Charter change (Cha-cha) since 1998—sought to strengthen the powers and functions of DBP as the country’s premier financial institution for national development.

The framework designates the finance secretary as the ex-officio chair of the DBP Board (which apparently some parties do not relish) and also includes the secretary of the National Economic and Development Authority (recently renamed Department of Economy, Planning and Development) an ex-officio member, as well as three independent directors.

Currently, the Department of Finance (DOF) has no representation on the DBP Board, unlike on the board of Landbank, where the finance secretary automatically sits as chair.

To boost its financial stability, the proposed charter would have authorized the DBP to offer a maximum of 30 percent of its shares to the public, or as it may deem necessary, to support its mandate and allow public participation.

The spurned bill (sponsored by Mark Villar in the Senate) also aims to jack up the bank’s authorized capital stock from P35 billion to P300 billion.

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According to the grapevine, the likely deal-breaker may have something to do with how the bank would have been exempted from most regulatory agencies, including the Governance Commission for GOCCs (Government-owned and -controlled Corporations).

This means that the DBP and the DOF that has been advocating for this legislation would have to regroup, wait for the next Congress—which would be reconstituted based on the outcome of Monday’s polls—and brave the legislative mill anew.

This last framework took about a year to shepherd through both houses of Congress, and is being closely watched by other government entities (like the Land Bank of the Philippines) that are waiting for their turn to dance the Cha-cha.