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Keisha Ta-Asan - The Philippine Star
November 29, 2025 | 12:00am
DBP president and CEO Michael de Jesus said the bank’s net income in 2025 would be “slightly less than last year,” driven mainly by higher provisioning.
Businessworld / File
MANILA, Philippines — The Development Bank of the Philippines (DBP) is preparing for a modest dip in earnings this year as it boosts loan loss reserves amid emerging asset-quality risks linked to the infrastructure sector.
DBP president and CEO Michael de Jesus said the bank’s net income in 2025 would be “slightly less than last year,” driven mainly by higher provisioning.
“We have a few non-performing loans. I would say big amounts, but not too many. So we have to reserve for those. That will affect our net income,” he said, adding that DBP aims to fully provision its bad loans.
Given this plan, De Jesus expects the bank’s income to take a hit. “That will affect our net income by maybe P1 billion to P2 billion less this year,” he said. “But the impact will be short-term. Next year, we will recover. We expect a strong 2026.”
De Jesus said DBP is tightening scrutiny of contractors following the nationwide flood-control controversy, a move that has also slowed loan releases and affected borrowers’ cash flows.
“Like many banks, we have many contractors and customers. So we’re just very careful now to make sure that there are no ghost projects, no flood control projects. We’re much stricter now than ever with regards to contractors,” de Jesus said.
While DBP has no exposure to the halted flood-control projects, it has paused even legitimate flood-control loans led by local government units, pending national-level clearance.
“Even for legitimate flood control projects, we’re putting it on hold for now… we want to make sure we have the clearance with the national commission, which is about to be formed,” he said.
He also said the heightened scrutiny is beginning to affect good contractors, who are having problems with some of their projects. “We expect to see that some of our borrowers will be affected in terms of loan repayments because of what’s going on.”
The bank sees its nonperforming loan ratio rising by about 0.5 percentage point, equivalent to roughly P1 billion to P2 billion in value. Infrastructure accounts for 50 to 60 percent of DBP’s loan portfolio, broadly covering roads, tourism infrastructure and agriculture-related projects.
On the other hand, DBP is moving forward with its modernization program, though procurement processes remain lengthy. The bank has earmarked P2 billion for technology investments over the next two years.
De Jesus said the bank remains upbeat despite near-term challenges. “We are cautiously optimistic… Our outlook is good, I can say for DBP,” he said.
The state-run lender’s net income surged by 20 percent year on year to P7.1 billion in 2024. This allowed the bank to exceed its net income target of P5.5-billion last year.
