DBP charter amendments unlikely to impact its ratings - Fitch

The proposed amendments to the charter of the Development Bank of the Philippines (DBP), allowing partial privatization through a stake sale, will unlikely affect its credit rating, according to Fitch Ratings.

- By KEISHA TA-ASAN

However, a significant improvement in DBP's capital position from such a sale can positively influence the bank's standalone credit profile.

"The proposed amendments to DBP's charter, which will allow the state to sell part of its stake in the bank, are unlikely to have any impact on the bank's sovereign support-driven issuer default ratings (IDR)," the debt watcher said in a commentary.

"However, a stake sale that significantly improves DBP's capital position may be positive for the bank's standalone credit profile, as it can restore underlying capital buffers that were eroded when DBP injected capital into Maharlika Investment Fund (MIF) in late-2023," it said.

Last year, the state-run bank expressed its intention to amend its nearly three-decade-old charter in a bid to cater to the ever-changing market and economic landscape.