Proposed amendments to the charter of the Development Bank of the Philippines (DBP), including the possibility of partial privatization, are unlikely to affect the bank’s credit rating, Fitch Ratings said.
While the changes, such as allowing the government to reduce its ownership stake below 100%, may not directly impact DBP’s rating, Fitch noted that a successful stake sale could strengthen the bank’s capital position and potentially improve its standalone creditworthiness.
The amendments aim to increase DBP’s authorized capital stock and allow the government to lower its ownership stake to a minimum of 70%.
Fitch emphasized that DBP’s current credit rating reflects strong government support, which is expected to continue despite potential ownership dilution.
DBP’s capital position was impacted by its contribution to the Maharlika Investment Fund, but the bank’s capital buffers are expected to continue to improve driven by profitability.
Fitch said that it has not factored in any stake sale into its base-case scenario. However, a successful sale, combined with improvements in asset quality and profitability, could lead to an upgrade in DBP’s viability rating.
