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DBP, Landbank seek regulatory relief amid Maharlika Fund contribution

State-run lenders Land Bank of the Philippines and Development Bank of the Philippines (DBP) have sought regulatory relief from the Bangko Sentral ng Pilipinas (BSP) as their respective capital infusions into the Maharlika Investment Fund (MIF) could render them non-compliant with the minimum capitalization requirements.

“I understand both Landbank and DBP requested regulatory relief from the BSP,” DBP president and CEO Michael de Jesus said in a text message.

“[The] relief is related to the fact that under BSP regulations, our contribution to Maharlika must be deducted from the computation of capital. We seek relief that our contribution not be deducted from capital,” de Jesus said.

Landbank has an authorized capital stock of P200 billion, while DBP has an authorized capital of P35 billion.

Landbank and DBP remitted P50 billion and P25 billion, respectively, to the Bureau of the Treasury for the initial capital of the MIF.

Under the BSP’s regulations, universal banks are required to have a minimum capitalization of P3 billion up to P20 billion, depending on the number of branches.

In a press conference, BSP Governor Eli Remolona said the regulatory relief being asked for by the banks was due to the capital infusion they provided to MIF, which “may make them non-compliant with our capital requirements.”

For her part, BSP Director Ma. Cynthia Sison said the state banks will still be compliant following their remittance to the MIF, but “they don’t want their capital position to decline substantially because of that.”

“For now, they’re still compliant, even after their contribution to the Maharlika. In principle, we can provide forbearance, which allows them not to comply for a period of time. But they will be expected to comply at some point. Forbearance is always temporary,” Remolona added. —VBL, GMA Integrated News