BIZ BUZZ: DBP Cha-cha vetoed

MANILA, Philippines — It would have lapsed into law, but at the 11th hour, the law amending the charter of the Development Bank of the Philippines was vetoed by President Marcos, Biz Buzz sources confirmed.

The proposed DBP Act— which would have been the first Charter change (Cha-cha) since 1998—sought to strengthen the powers and functions of DBP as the country’s premier financial institution for national development.

The framework designates the finance secretary as the ex-officio chair of the DBP Board (which apparently some parties do not relish) and also includes the secretary of the National Economic and Development Authority (recently renamed Department of Economy, Planning and Development) an ex-officio member, as well as three independent directors.

Currently, the Department of Finance (DOF) has no representation on the DBP Board, unlike on the board of Landbank, where the finance secretary automatically sits as chair.

To boost its financial stability, the proposed charter would have authorized the DBP to offer a maximum of 30 percent of its shares to the public, or as it may deem necessary, to support its mandate and allow public participation.

The spurned bill (sponsored by Mark Villar in the Senate) also aims to jack up the bank’s authorized capital stock from P35 billion to P300 billion.

According to the grapevine, the likely deal-breaker may have something to do with how the bank would have been exempted from most regulatory agencies, including the Governance Commission for GOCCs (Government-owned and -controlled Corporations).

This means that the DBP and the DOF that has been advocating for this legislation would have to regroup, wait for the next Congress—which would be reconstituted based on the outcome of Monday’s polls—and brave the legislative mill anew.

This last framework took about a year to shepherd through both houses of Congress, and is being closely watched by other government entities (like the Land Bank of the Philippines) that are waiting for their turn to dance the Cha-cha. —Doris Dumlao-Abadilla

READ: Possible Landbank, DBP IPO seen as a good move

No word from GCash … yet

Popular e-wallet GCash has been setting the stage for its stock market debut for quite some time already.

Just a quick recap: Last year, people were already buzzing when GCash doubled its valuation to $5 billion thanks to fresh funding from Ayala Corp. and Japanese bank Mitsubishi UFJ Financial Group (MUFG).

The P23-billion deal to increase the shareholding of the Ayala Group’s AC Ventures Holdings Inc. in GCash to 13 percent was closed just this February. MUFG likewise got its 8-percent stake.

In between all of that, there was the issue of easing the 20-percent minimum public ownership requirement for companies that wish to list on the local bourse.

Philippine Stock Exchange president Ramon Monzon confirmed to reporters in March that the Securities and Exchange Commission (SEC) had already approved its proposal to lower this to 15 percent.

This, of course, did not come out of nowhere. Monzon himself said GCash had expressed concerns over having to sell 20 percent of its shares to the public, saying it may be “too big for the market to absorb.”

Later, the SEC issued a statement saying it was “firm” in implementing the 20-percent public float requirement, although certain exemptions were allowed, especially for initial public offerings (IPOs) exceeding P5 billion in value. In this case, GCash is qualified to file for exemptive relief, especially since its IPO is pegged at as high as P95 billion.

READ: GCash IPO prospects rise with $5B valuation

But the question now is whether GCash has actually filed for an IPO, one that is already seen as the largest in Philippine corporate history.

SEC Commissioner McJill Bryant Fernandez shed some light for reporters last week: “We have yet to receive any [application].”

This is not without merit: GCash itself has said that it may have some trouble making its public debut because of all the tariff drama abroad.

Still, Fernandez said they were hoping to see this much-awaited (and delayed) IPO by the “middle of the year.”

We hope so, too. With the stage and everything else already set, the only thing missing here is GCash. —Meg J. Adonis