LandBank, DBP to get P30-B capital from proposed 2016 budget


THE national government is allotting P30 billion from the proposed 2016 national budget of P3.002 trillion to boost the capitalization of state-owned banks, according to the Department of Budget and Management.

In a press briefing on Tuesday, Budget and Management Secretary Florencio Abad said P20 billion will go to the Land Bank of the Philippines (LandBank) and P10 billion to the Development Bank of the Philippines (DBP).

“We have set aside P30 billion to improve the resiliency/stability of the LandBank and the DBP,” Abad said.

The Budget chief noted the P30-billion allotment for LandBank and DBP is in line with the capital requirements spelled out in the Basel 3 framework.

Capital adequacy under Basel III is designed to boost the banking sector’s capacity to absorb shocks, enhance risk management, and increase transparency. The Bangko Sentral ng Pilipinas has ordered universal and commercial banks in the Philippines to comply with Basel III’s 10 percent capital adequacy ratio standards with a Tier 1 common equity of 6 percent and Tier 1 capital of 7.5 percent.

The additional capitalization for the state-owned banks is part of the Department of Finance’s proposed budget of P55.3 billion for 2016.


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