Audit exposes systemic loan flaws and profit plunge at Development Bank of the Philippines
The Commission on Audit found major weaknesses in DBP's lending and recovery processes, driving a sharp drop in net income and a surge in non-performing loans.
The 2025 audit by the Commission on Audit identified systemic deficiencies in the Development Bank of the Philippines, including poor collateral verification, slow recovery actions and an uncalibrated expected-credit-loss model. As a result, the bank’s non-performing loan balance grew substantially while its net income dropped by about 43 percent. The audit singled out the ICONS program, created to fund contractors for the Build, Build, Build initiative, as a major liability with a majority of its loans past due.
Specific loan cases showed releases that bypassed progress-based rules and delayed demand notices, undermining accountability. DBP’s board had been aware of the issues for years but only terminated the program in mid-2026. COA recommended probing possible negligence among officers, and the bank’s management has tasked its legal unit with an internal inquiry.
Why it matters
Weak loan controls at a state bank threaten public funds and could impair infrastructure financing.
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