WE are writing in reference to a news article published in the May 17, 2017, issue of your publication, titled “Speaker smells P5.6-B in DBP behest loans,” written by Ms Llanesca T. Panti.
The article mentioned “the Development Bank of the Philippines’ (DBP) decision to grant at least P5.6billion worth of loans to supposedly favored companies.” It also cited “2015 COA report findings showing that the DBP granted P5.6 billion worth of loans to three borrowers despite more than 10 exceptions to and deviations from existing credit policies ‘which could result in a higher DBP credit risk and possible loss of government funds’.”
May we clarify that DBP strictly follows and observes stringent credit policies and guidelines to ensure that loan transactions are aboveboard and compliant with relevant regulatory requirements. DBP continually applies a credit strategy that provides for safeguards to manage credit concentration risk that may be brought about by exposure to single name/group borrowers and industry sectors, among others. Credit risk mitigation measures are also employed through the acceptance of eligible collaterals and guarantees, among other safeguards. Furthermore, said loans are no longer included in the audit observations of COA for 2016 given the foregoing.
May we, thus, assure the public that no behest loans were granted as alleged in the abovementioned news article. DBP continues to uphold the highest standards of banking practice, while serving the best interest of the public and the nation. The bank shall continue to direct its lending activities to developmental projects that will bring about the greatest benefit to more Filipinos countrywide.
In the interest of truth and fairness, and to safeguard the integrity of DBP as a development financial institution, we hope that our statement regarding this issue will merit space in your widely-read publication.
MARIANNE P. GARCIA
Senior Assistant Vice President
Corporate Affairs Department
Development Bank of the Philippines