DBP optimistic on growth despite profit drop

THE DEVELOPMENT Bank of the Philippines (DBP) remains optimistic on its prospects for this year despite posting a lower net income in 2025 due to higher provisioning to preserve its asset quality following delays in contractors’ loan repayments amid a corruption scandal linked to government projects.

The government-backed lender’s net profit dropped by 39.76% to P4.28 billion in 2025 from P7.105 billion in 2024, according to its financial statements posted on its website.

DBP President and Chief Executive Officer Michael O. de Jesus said in November that they expected their earnings to decline as they set aside more loan loss buffers to help cushion the impact of contractors’ delayed payments.

The bank earmarked provisions amounting to P16.376 billion last year, more than double the P7.01 billion seen in 2024.

“As part of its ongoing portfolio and risk management framework, the bank has made additional provisions for credit losses for 2025. This reflects disciplined management of credit risk across the portfolio and through the economic cycle,” Mr. de Jesus said in an e-mailed statement late last month.

“Looking ahead, DBP remains cautiously optimistic. The bank’s outlook is positive, its provisioning levels are prudent, and its developmental efforts continue to be aligned with the National Government’s socioeconomic agenda,” he said. “While there are administrative challenges that may have some impact on our balance sheet given DBP’s active involvement in financing infrastructure projects, we are expecting a stronger financial performance starting in the first quarter of 2026.”

He added that the bank is adopting remedial measures to contain any potential increase in nonperforming loans, including the creation of a “dedicated” task force to curb delinquencies and facilitate the collection of outstanding receivables.

The bank’s net interest income grew by 10.48% to P29.115 billion in 2025 from P26.353 billion. Interest earnings went up by 8.82% to P552.886 billion, while interest expenses increased by 6.84% to P23.77 billion. 

Meanwhile, other income inched down by 0.49% to P5.3 billion from P5.33 billion as it booked lower foreign exchange gains, which offset increases in its fee-based earnings and trading and investment gains.

Other expenses rose by 6.06% year on year to P17.53 billion from P16.53 billion.

DBP’s net loans decreased by 2.39% to P492.351 billion at end-2025 from P504.432 billion in 2024.

On the funding side, total deposits increased by 7.1% to P798.296 billion from P745.355 billion.

The bank’s assets stood at P1.04 trillion at end-2025, growing by 4.497% from P996.03 billion in 2024.

Its total capital funds were at P100.77 billion, up 6.19% from P94.9 billion a year prior.

BOND ISSUANCE
Meanwhile, the bank is also planning to issue bonds this year, likely within the second half.

“The indicative issue size is between P10 billion and P50 billion, or its US dollar equivalent, with a medium-term tenor of approximately five to 10 years, depending on market demand and pricing considerations at the time of issuance,” Mr. de Jesus said.

Funds to be raised from the planned issuance will refinance its maturing obligations and provide funding support for its development mandate, which includes priority infrastructure, climate resilience, and disaster risk mitigation programs.

“With respect to timing and market sentiment, management recognizes the importance of carefully calibrating any fundraising activity in light of current public discourse surrounding flood control projects,” the official added. “As a GOCC (government-owned or -controlled corporation), the bank is highly cognizant of reputational risk, investor perception, and transparency considerations.”

“Accordingly, any market transaction will be undertaken only when conditions are assessed to be conducive, both from a financial market standpoint and a governance and public confidence perspective.” — Aubrey Rose A. Inosante with a report from A.M.C. Sy