the colors of development - development bank of the

The Colors of Development

Development Bank of the philippines

01 The Colors of Development: Our2012Report

02 MessagefromtheChairmanand thePresident&CEO

06 AbouttheDevelopmentBank ofthePhilippines

10 CorporateGovernance

16 OurStakeholders:AtTheHeartofour SustainabilityAgenda

20 The Colors of Sustainable Development

Profit:SpurringInclusiveEconomicGrowth

29 Planet:GrowingSustainableFutures

33 FeatureStory:DBPCelebratesaDecadeofLivinganEnvironmentalEthic

39 People:OurCoreValuesforOurCoreResource

43 People:SharingtheFruitsofourSuccesswiththeUnderprivileged

46 People:ClientSatisfactionattheCoreofourProductsandServices

50 GlobalReportingInitiativeIndex

Contents About this Report

In line with our commitment to transparency andaccountability,theDevelopmentBankofthePhilippines(DBP) presents its fifth Sustainable DevelopmentReport,The Colors of Development.Wepreparedthis incompliance with the Global Reporting Initiative (GRI)

G3.1Guidelinestopresentaclear,accurate,andbalancedview of our sustainability performance in 2012. Our GRIApplicationisself-declaredatLevelB.TheGRIsustainabilityframework covers all aspects of sustainable developmentevolved by the leader among corporate sustainabilityreportingsystemsintheworld.

Since2008,wehavebeenvoluntarilypublishingourannualSustainable Development Reports for our stakeholders insupport of our vision of becoming a globally recognizeddevelopment financial institution. By monitoring andreporting our programs, we serve as a catalyst for aprogressive and poverty-free Philippines. This constitutesour continued contribution towards raising the level ofcompetitivenessofthePhilippineeconomyforsustainablegrowth and supporting infrastructure development,responsible entrepreneurship, efficient social services andprotectionoftheenvironment.

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This report focuses on the multiple aspects ofdevelopment finance, a rainbow of initiativespursuedbyDBP’smission-drivenadvocates,thusdistinguishingtheBankfromallotherfinancialinstitutions.Froman integratedreport in2011,

wearerevertingtoastand-aloneSustainableDevelopmentReport. We do this to accommodate the schedules ofrelease of various information on which certain keyperformance indicators depend. By doing so, we hope toimprove the quality and timeliness of our sustainabilitydata.Protocolsforfinancialreportingguidedoureconomicdisclosures,whileenvironmentaldatawasculledfromourEnvironmentalManagementSystemandtheGHGProtocolStandard.

We have prepared The Colors of Development followingthe GRI G3.1 Guidelines’ protocol for 49 performanceindicators, which include discussions on our corporatehead office, our governance, commitments, and socialresponsibility and sustainability initiatives along with ourissues,challenges,andplannedactions.ThisalsoincludesageneraldescriptionoftheBank’ssustainabledevelopmentpolicy and the specific practices it translates into in themanagement of our business. Our development mandateandfourdevelopmentthrustsguidedusinourselectionofindicatorsthatwecoveredinthisreportastheyhave,overtheyears,guidedus in improvingourproducts,programs,andservicesaccordingtotheneedsofourcustomers.WecovertheperformanceoftheHeadOfficeand15RegionalMarketing Centers (RMCs) and a network of 87 branchesnationwide. It highlights particular issues related tosustainability of our operations in different areas as wellasthosethathavethepotentialtobecomematerialtotheBank’slong-termsuccessandwithrespecttotheissuesandconcernsofourstakeholders.

There were no significant changes made to the Bank’sstructure in the past year, with subsidiary details andupdates available in “About the Development Bank of thePhilippines”onpage6.Assuch,thebasisforreportingon

The Colors of Development: Our 2012 Reportjoint ventures, subsidiaries, leased facilities, outsourcedoperations,andotherentitiesdoesnotsignificantlyaffectcomparability from the last period of reporting and theperiod covered in this Report. Apart from reverting to ourstand-alonestatusforthisreport,nosignificantdifferencesintermsofscopeandboundarieswereappliedduringthisperiodascomparedtopreviousreportingperiods,norwerethere any restatements of any information published inpastreports.

The Report covers national development issues that havebeen impacted by DBP’s products and services, includingcountryside development, infrastructure development,social development, and small- and medium- enterprises.It highlights our engagement with internal stakeholders,government,bankclients,businessorganizations,andtheBank’s beneficiaries and environmental initiatives. Ourcommitments,relationshipsandinteractionswiththemaredescribedinthediscussionofoureconomic,environmental,labor, society, and product responsibility performanceindicators.

The Colors of Development hasbeenpreparedanddevelopedthrough the contribution of the various departmentsof the Bank. We likewise reconstituted the SustainableDevelopment Report Committee, comprised of membersfromvariousdepartmentstaskedtohandlethequalitativeandquantitativedatagatheringfromtheconcernedunitsoftheBank.Thisreportisbasedontheavailabledataandmeasures evaluated by business units and sourced fromclientfeedback.Itisourcommitmenttoconsistentlydevelopsystemsandprocessestobettercapturetheimpactsofourbusiness on the community, making these sustainabilitymeasurespartsofourstrategy.Tokeepimproving,weplantoseekexternalassuranceonourfuturereports.

Forfurtherinformationonthisreportaswellasanyqueriesor comments, kindly email Benel D. Lagua, Executive [email protected].

1TH E COLORS OF DEVELOPMENT

Message from the Chairman and the President & CEO

We are pleased to present the 2012Sustainable Development Reportof the Development Bank of thePhilippines(DBP)ontheoccasionofour 65th anniversary. Throughout

the years, we have contributed to the improvementof lives of Filipinos across the nation, and our 65thanniversarywasastrongone.Indeed,doinggood“paysdividends,”asweattainedanetincomeofP4.13billion,higherthantheP4.0billionachievedthepreviousyearwhile offering financial products and services thatrespondtothespecificneedsandrealitiesofourprioritysectors.Ourfinancialstabilityhasmade itpossible forus to sustain our continued service of priority sectorsanddevelopmentoperationstowardnationbuilding.

Though successful in reaching our financial targets,we understand that economic growth is not enough.Development does not come in the single color of apositivebottomline.

Inanefforttomaketheseeconomicgainsfeltbymoreand more Filipinos, we continued to reach out andserve the full spectrum of disadvantaged groups whohave been excluded from the growth story. We madesure to always sync our projects with the 2011-2016Philippine Development Plan. Believing our programsmust generate economic opportunities for as manyFilipinos as possible, particularly those residing in thecountryside, we measured our efforts against the truecolorsofdevelopment.

In2012,theresponsiveprogramsthatwedevelopedforthefoursocialsectors—housing,healthcare,education,andbasicsectorscomprisingOFWs,indigenouspeoples,andpeoplewithdisabilities—providedbothcreditandtechnical assistance to key priority areas in 2012. We

Dear partners and friends,

DBP SUSTAI NABLE DEVELOPMENT R EPORT 20122

experiencedabanneryearforourLogisticsInfrastructureDevelopmentProjectwithP2.58billioninloanreleases,approved a total of P3.38 billion and disbursed aninitial amount of P488.9 million for communitydevelopment, launched a P1-billion facility for publicsafety and security projects under the Financing forPublic Safety Initiatives program, and approved loansforsustainablehealthcareandeducationthatreachedP1.64billionandP283million,respectively.Wealsogavesolid support to the MSME sector through the CreditSurety Fund (CSF) Program of the Bangko Sentral ngPilipinas,assisting26CSFswithloanapprovalstotalingP42.05 billion—of which P26.70 billion was released,benefitting 386 participating cooperatives and NGOsin the countryside—and launched the AgribusinessDevelopment Program (ADP), which was implementedinJune2012toreinforcecomplianceofDBPwithRANo.10000,alsoknownasthe“Agri-AgraReformCreditActof2009.”

We attribute our continued viability and stability tothe public trust. We remain the country’s premierdevelopment financial institution because our clientsare confident in our ability to take care of them andtheir financing and banking needs. The high level ofpublictrustthatweenjoyasapublicofficeisthedirectresult of good governance. We nurture a culture ofethics,compliance,andsocialresponsibilitythroughtheinstitution of a firmly embedded governance programthatispracticedatalllevelsoftheorganization.

“Our mandated role in the country’s sustainable development calls on our Bank to look after the well-being of every Filipino.”


We created the Corporate Governance Office to makegoodgovernanceapillarofDBP’soperations,andwearethefirstbanktohaveadepartmentdedicatedtogoodgovernance.WewerealsoinitiatedintothePerformanceGovernance System of the Institute for Solidarity inAsia, turning us into the first GOCC to have the honoras a result of a public revalida that reviewed andconfirmedtheprogressof theBank’sgoodgovernanceprogram. Another effort towards good governance isourparticipationasasignatoryintheIntegrityInitiativePledge, a campaign to promote transparency, ethicalbusinesspractices,andgoodgovernance.DBPisalsothefirstbanktoreceivean“Advanced”ratingintheIntegrityInitiative’s Self-Assessment Tool, which was confirmedby the panel of validators due to integrity beingmainstreamed in the organization and best practicesbeingdemonstratedbank-wide.

Our sustainability report is another step instrengtheningpublic trust.Asa reportonour impactsand initiatives, we are confident that it will lead us toeven better performance so that we remain a strongcatalyst of development and nation building. Markingthe milestones of our 65th year and the 10th year ofour Environmental Management System, The Colors of Development offers a detailed discussion of ourmanagement approaches and triple bottom-lineperformance, which clearly and broadly contextualizeour initiatives, illustrate how DBP truly operationalizessustainability, and prepare us for a GRI checked,externallyassuredreportnextyear.

We know that much remains to be done. By 2016, weenvisionourselvesasagloballyrecognizeddevelopmentfinancialinstitution,servingasacatalystforaprogressiveand poverty-free Philippines. DBP has a crucial role in

raising the level of competitiveness of the economyfor sustainable growth, supporting infrastructuredevelopment, responsible entrepreneurship, efficientsocialservices,andprotectionoftheenvironment.

Thewayaheadischallengingbutclear.Withsustainabledevelopmentasourframework,DBPspursthecreationof appropriate, responsive, timely, and effectivedevelopment initiatives. We will expand our loanportfoliototakeadvantageofouruniquepositionasadevelopmentinstitution.Wewillundertakepartnershipopportunities in grassroots communities and newinitiativesfordevelopmentfinancing.Wewillcontinuetobroadenournationwidereachandpresence,aidinginourpenetrationofmarketsandgrowthareasaswellasoursupportformarginalizedsectorswithnoaccesstobankingservices.

Allthesewewillrealizebecauseofourpeople.Onthisnote, we would like to thank all of our employees fortheircontributiontothefulfillmentofourmandate.Wehavebeencontinuouslyabletoachieveourobjectivesbecause of your commitment and dedication. ThankyoutoeveryoneforenablingDBPtodowhatwedoforthenation.

Jose a. nuñez, Jr. Gil a. Buenaventura Chairman PresidentandCEO



About the Development Bank of the Philippines

We, the Development Bank of thePhilippines (DBP), stand at theforefront of financial institutionsthat address the sustainabilitychallenges of our country’s road

to progress. Attuned to the needs and realities ofsocially and economically marginalized sectors, weenjoyauniquepositionthatenablesustostrategicallyinfluence and accelerate sustainable growth throughthe provision of resources for initiatives that promote,nurture,andsupporteconomicactivitiesgearedtowardthecontinuedwell-beingoftheFilipinopeople.

our evolution

Oursisahistoryofbankingfordevelopment.WithrootsthattracebacktotheCommonwealthperiodwhentheearlyinfrastructurefordevelopmentfinancingwaslaidby the government, we were formed in 1958 throughthe re-organization brought about by changes in the

management of government trust funds, assets andresources. Expanding our facilities and operations toacceleratenationaldevelopmentefforts,weestablishedanetworkofbranchesthroughoutthecountry,deliveringsubstantial benefits in capital formation, employmentgeneration and increased revenues, particularly in thecountryside.

In1986,weimplementedaninstitutionalstrengtheningprogram covering a thorough revision of the creditprocess and a training program for the intensiveimplementationofnewlendingthrusts,reopeningourlending windows for housing, agriculture, and small-andmedium-scaleindustries.In1995,weweregrantedan expanded banking license and attained universalbankingstatus.

With a permit to operate as an expanded commercialbank granted by the Bangko Sentral ng Pilipinas onDecember 20, 1995, we began to serve the following


7COLORS OF DEVELOPMENT

markets: depositors; borrowers; potential and existinginvestors; local government units; private corporationsandbusinesses;financialinstitutionsandbanks;micro,smallandmediumenterprises;andthegeneralpublic.

Today, we are classified as a development bank thatmay perform all other functions of a thrift bank. Ournewcharterenablesustoachieveourprimaryobjectiveof providing the best banking services to small- andmedium-scale agricultural and industrial enterprisesas well as to individuals. We give financial assistanceto participating financial institutions for lending toinvestment enterprises and direct borrowers. We arealso involved in other activities, including investmentsingovernmentandprivatefinancialinstruments.

With headquarters located at Sen. Gil Puyat AvenuecornerMakatiAvenueinMakatiCity,weoperatethroughourmainbranchandotherbrancheslocatedalloverthePhilippines.We were created as a “Parent Bank” underRepublicActNo.85,asamendedbyExecutiveOrderNo.81datedDecember3,1986.

In line with President Benigno Aquino III’s policy of“TuwidnaDaan,”wecreatedin2012theDBPCorporateGovernance Office, a department dedicated tooverseeing our good corporate governance initiatives.We also hold the distinction of being the first GOCCto be initiated into the first phase of the PerformanceGovernance System by the Institute of CorporateDirectorsin2012.

We generated a net income of P4.13 billion. A total ofP112.61 billion went to the financing of infrastructureand logistics,environment,socialservices,micro,smallandmediumenterprises,andotherstrategicsectors.Wecontinuedtoremaintruetoourmandateofsupportingcountrywide development with 93% of DBP’s loanportfoliodedicatedtodevelopmentalprojects.

our subsidiaries

We are the country’s major pipeline of internationalfunds from multilateral and bilateral institutions forofficial development assistance (ODA) programs and

grants. We focus primarily on four priority areas ordevelopment thrusts: social services, environment,infrastructure and logistics, and micro-SMEs. Aidedby our subsidiaries, we continue our economic pump-priming and program-type lending to strategic sectorsofthecountry.

the DBp management Corporation (DBpmC) assistsus in managing distressed accounts and disposingof acquired assets. It was later authorized to set up aremittance office in Hong Kong. It incorporated theMillennium Challenge Account-Philippines (MCA-Philippines) as its own subsidiary. MCA-Philippines isthe accountable entity for the millennium challengeaccount compact assistance. This was granted by theMillennium Challenge Corporation, a US governmentcorporationwithamissionofreducingglobalpoverty.

the DBp Data Center, inc. or DBp DCi has beensupportingourITInfrastructureforthepast30years.In2012,DCIfocusedonassistingourinitiativesineBankingand other cashless transactions. It also provided theworkforceforthedevelopmentandmaintenanceofoursystemsandapplications.

the DBp leasing Corporation, formerly the NDCMaritime Leasing Corporation (NMLC), complementsour maritime financing activities. It facilitates thedeployment of RORO vessels in RORO missionaryroutesinaccordancewiththeMedium-TermPhilippineDevelopment Plan for 2004-2010. It now engages inthe business in all aspects, and arranges, underwritesor administers leases of all types of real or personalproperties. It also utilizes internally-generated fundsand secures borrowing for the acquisition of second-handandbrand-new, locally-constructedROROvesselstobeleasedtoqualifiedoperators.

the al-amanah islamic investment Bank of the philippines (aaiiBp) is the first and only bank in thecountry licensed to offer Islamic Banking. Established



in 1973, the AAIIBP is mandated to provide medium-and long-term credit facilities to Muslim-dominatedprovinces in the country and take the lead in thereconstruction work in Mindanao, Sulu and Palawan.ItsremittanceservicethroughthePhilippinePaymentsand Settlements System (PhilPass) enables its clientsfromMindanaocommunitiesandOFWstoaccessreal-timesettlementandcollection.Ithasalsoreceivedthedirectivetopursueitsdivestmentandprivatization.

our products and services

In linewithourprimaryobjectiveofprovidingservicestosmall-andmedium-scaleagriculturaland industrialenterprises, we offer a wide range of products andservices that address specific funding and bankingneeds of our various clients. These range from projectfinancingtoahostofdepositandinvestmentproductsandservices.Wealsooffertradeproductsandservices,transferandremittanceservices,andtreasuryproductsand services. Loans are available through our retailand wholesale lending operations for capital assetsinvestmentsandworkingcapital.

ProductsandServices • InvestmentBanking • DepositProductsandCashServices • TradeProductsandServices • TreasuryProductsandServices • OFWRemittanceProductsandServices • TrustServices • ElectronicBanking

DevelopmentFinancing • InfrastructureandLogistics • EnvironmentInitiatives • SocialServices • Micro,SmallandMediumEnterprises

ThefollowingretailproductsandservicesareavailablethroughtheutilizationofbothbankandODAfundsinordertomeetthefinancingneedsofdifferentindustries/programs:

a. TermLoans–Credittransactionswithaspecificstipulated limitandexpirydateofmorethanone year. It is not reusable, is liquidating innature through a repayment program, andpayableinfullatmaturitydate.

b. ShortTermLoans/CreditLines–Creditfacilityavailable to a client for use and reuse up tothe specified limit unless amended, revisedor revoked and has maturity of one year orless. These are utilized to finance specificcomponents of a borrower’s working capitalrequirements.

c. Back to Back Deals – Loans secured byplacementsordeposits(1:1loans)

d. Bill Purchase Line – Facility wherein wepurchase localchecks/negotiable instrumentsforcollectionfromotherbanksthatareeithercashedinorcreditedtothecustomer’saccount.

Ourmarketingunitsserveasmajorvehiclesforbuildingour high-grade, quality portfolio since they providedemand-drivenbankingservicesforourclients.

As of December 2012, we had a total workforce of2,321 employees: 625 are officers (26.9%) and 1,696are supervised workers (73.1%), while 883 are male(38%) and 1,438 are female (62%). Our employees arecommittedtonurturing,maintaining,andsafeguardingthe economic growth and well-being of developingbusiness communities as well as raising the level ofcompetitivenessoftheeconomyforsustainablegrowth.We support infrastructure development, responsibleentrepreneurship, efficient social services, andprotectionoftheenvironment.Weforeseebecomingaglobally-recognized development financial institution,servingasacatalyst foraprogressiveandpoverty-freePhilippinesby2016.

awards and Citations

By positively sustaining progress through the rightbalance between development and profitability, wehaveearnedthefollowinghonors:


9COLORS OF DEVELOPMENT

• Best Green Project for Boracay Water Initiative forPromoting Water Sustainability in Boracay Island –AssociationofDevelopmentFinancingInstitutionsinAsiaandthePacificDevelopmentAward2012

• Outstanding Lending Bank under the CreditSurety Fund Program – Bangko Sentral ng Pilipinas2012Awards

• OutstandingProgramPartnerAwardasAdministratoroftheIndustrialGuaranteeandLoanFund–BangkoSentralngPilipinas2012Awards

• Best TV Ad Branded Category for “Water” – 2012CatholicMassMediaAwards

• First GOCC to be initiated into the PerformanceGovernance System (PGS) – Institute for SolidarityinAsia

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Corporate Governance

ThevisionofDBPistobeagloballyrecognizeddevelopmentfinancial institution,servingasa catalyst for a progressive and poverty-freePhilippinesby2016.

Every day, we realize our vision by working towardraising the level of competitiveness of the economyfor sustainable growth; supporting infrastructuredevelopment, responsible entrepreneurship, efficientsocialservicesandprotectionoftheenvironment;andpromoting and maintaining the highest standardsof service and corporate governance. To ensurethat everyone at DBP actively contributes to theirachievement,weintegrateconcretemeasuresthatcarryout our vision and mission into our products, services,processesandpractices.

To sustain the effectiveness of our mandate and theefficiencyofouroperations,weoperateontheplatformofgoodgovernance.GuidedbytheManualonCorporate

Governance and through our continued compliancewith the Bank’s Code of Ethics, we have committedourselvestoitsprinciplesandbestpracticesandupholdthepolicyofthestatetopromotehighethicalstandardsinpublicservice.

As our systems are regularly upgraded, our mostimportantassets—ourpeople—continuouslyundertakeskillstrainingandvaluesformation.Everyone—fromtheBoardofDirectorsandManagementtoourofficersandstaff—holds himself and herself accountable to theFilipino people.We know that we are fully responsiblefor performing our duties with utmost responsibility,integrity,competence,andloyalty.

We have also established a permanent CorporateGovernance Office with a full complement. DBP holdsthedistinctionofbeingthefirstGOCCtobeinitiatedbytheInstituteofCorporateDirectorsintothefirstphaseofthepublicgovernancesystem.


Board of Directors

OurBoardofDirectorsexercisescorporatepowersandisprimarilytaskedwithdirectingtheaffairsandbusinessoftheBankandmanagingandpreservingthecorporation’spropertiesinlinewiththeBank’scorevaluesofintegrity(honesty, truthfulness, and transparency), excellence(competence,dedicationtowork,andprofessionalism),teamwork (harmony,cooperationandsynergy),servicetoothers (customer-oriented),and lovefor theFilipino(loveofcountryanditspeopleeverywhere).

TheBoardconsistsofninemembers,alldulyappointedbythePresidentoftheRepublicofthePhilippines.TheDirectors are appointed based on provisions underSection8oftheDBPCharter,whereamongothers,theyare expected to have attained proficiency, expertise,and recognized competence in banking, finance, law,agriculture, business management, or governmentadministration.

Two of the board members are designated asindependent directors of DBP, duly approved by theBangko Sentral ng Pilipinas, and chosen among thenine directors appointed by the President of thePhilippinesfollowingSubsectionX141.1oftheManualofRegulationsforBanks.

The President and Chief Executive Officer of the Bank,whoisalsotheViceChairmanoftheBoard,isconsideredanexecutivedirector.

Board Committees

We have set up the following committees to aid in thecompliancewiththeprinciplesofgoodgovernance:theExecutiveCommittee,AuditandComplianceCommittee,RiskOversightCommittee,HumanResourceCommittee,Trust Committee, Governance Committee, and theDevelopmentAdvocacyCommittee.

The executive Committee (exeCom) approves andreviewsindetailprogressagainstplans,withemphasison those activities or units that have not beenperformingwithinagreedstandards.

The audit and Compliance Committee (auditCom)supervises the Bank’s financial reporting and control,andinternalandexternalauditfunctions.

The risk oversight Committee (roC) oversees theadequacy and effectiveness of existing risk policies,procedures and controls, identifies and evaluates riskexposure, and assesses the probability of each riskbecoming reality.The Bank faces risks related to credit(which include conflict of interest), market, liquidity,interest rate, operations, compliance, strategy, andreputation. Essentially, we manage the first six risksquantitativelysuchasthroughrisk limits.Risksrelatedto strategy and reputation are managed through thebank’spoliciesandprocedures.

The human resource Committee (hrC) formalizesmanagementrecommendationsonHR-relatedmatters,suchasbank-widecompensationandbenefitsprograms,executiveremuneration,legacycosts,organizationplansandstructures,manpowerplans,andthelike.

The trust Committee (trustCom) oversees theinvestment activities and operating policies andproceduresoftheTrustdepartment,andreviewsoverallassetsheldintrusttodeterminethesafety,value,andadvisabilityofsuchassets.Thecommitteealsoensuresthat recommendations on investments are elevated tothehighestgoverningbody.

The Governance Committee (GC) addresses systemicbreachesoftherulesandregulationsofgoodgovernance.It likewisereviewsandevaluatesthequalificationsofallpersonsnominatedtopositionsrequiringappointmentbytheBoard.Itoverseestheperiodicperformanceevaluationof the Board and its committees and the ExecutiveManagement through peer assessment, including anannualself-evaluationoftheCommittee’sperformance.Itreviewsandvetsalltheothercommitteeactionsfromthestandpointofdutyandcare,andconcurrentlyensuresthatallactionsandresolutionstakenarewithinthepurviewofbestpractices.


The Development advocacy Committee (DaC) takesthe lead in generating ideas, promoting awareness ondevelopmentissues,advocatingdevelopmentprogramsand projects, expanding and strengthening linkageswithin and outside the Bank towards a unified anddistinct approach to strengthen and accomplish DBP’sdevelopmentmandate.

Under Executive Order No. 24, s. 2011 and GCGMemorandumCircularNo.2012-02,eachmemberoftheBoardisentitledtoperdiemsandothercompensation.

management Committees

Key management committees complement theBoard committees in further ensuring prudent levelsof responsibility and accountability. These are: theManagementCommittee,CreditCommittee,andAsset-LiabilityManagementCommittee.

The management Committee is the highest collectiveapproving body for policy recommendations andoperational matters that impact the Bank. Thecommittee also ensures that employees are able to

make recommendations on operational, credit, andadminitrativematterstothehighestgoverningbody.

The Credit Committee deliberates and approves allcredit-related matters beyond the authority of theregionaloffices.

The asset-liability management Committee is taskedto build and promote a stable funding structure whileconcurrently ensuring that there is a proper match ofassetand liabilitymaturitiesandensuring liquidity fortheinstitution.

risk management system

Tomaintainastrongcapitalposition,weregularlyreviewourcapitallevelsandoverallcapitalposition.Weconductanenterprise-wideriskassesmentandintegratedstresstesting to be able to respond immediately to changesin the banking industry and regulatory environment,determine the required capital that serve as buffer forshocks,anddetermineourvulnerabilitiestobeabletosafeguardourselvesfromit.


Specifically, our risk management system addressesthreats of escalating risk exposures that come withour growth and expansion initiatives, market-ratedistortionsdrivenby increasedcompetitionwithin theindustry, operational and balance sheet implicationsof regulatory changes, increasing complexity of stress-testing methods, tighter capital standards, and theimplications of divergence between regulatory andeconomic capitals. Our risk management approach isdiscussedindetailinour2012annualreport.

serving the public’s Greater Good

We engage in public policy development through thesubmission of papers that discuss our positions andrecommendationsonbillsandresolutionsthatdirectlyaffect our development policies and initiatives. Wework closely with policy-makers and regulators, andwe continued to participate in the crafting of nationalpolicies affecting the economy and the banking sectorin 2012. Since any policy changes will inadvertentlyaffect our development mandate, the Bank steadilyconveys its inputs, comments, and recommendationson congressional bills and resolutions throughofficial position papers submitted to the appropriatecongressionalcommittees.

Forexample,withregardtoSenateBills (SB)No.1350,2961, 2971 and House Bill (HB) No. 4688 all entitled“An Act Governing the Creation and Accreditation ofMicro-Enterprise Development Institution, and forOtherPurposes,”wefullysupportthecreationofalegalframework to establish Micro-Enterprise DevelopmentInstitutions (MEDIs per SB 1350; MICRODEVs perSB2961, 2971, and HB 4688) aimed at eradicatingpoverty in the Philippines.This is in line with our ownmandate to promote the development of small andmedium enterprises, especially in the countryside. WeanticipatethatMEDIs/MICRODEVscanserveaspartnersby being potential conduits in mobilizing financialresourcestowardasectorwhoseaccesstoformalcreditmarketshasalwaysbeenlimited.

WeinformedtheSenateCommitteeonEconomicAffairsof our engagement in wholesale lending to accreditedmicrofinanceinstitutions(MFIs).Thisputsusinauniquepositiontocontributetothesuccessoftheoperations

oftheMEDIs/MICRODEVssincetheycangainaccesstoDBP’s wholesale lending program once they pass theaccreditationcriteriaforeligibleMFIs.

In the matter of House Resolution (HR) No. 2867entitled“AnActAbolishingCertainGovernment-Ownedand Controlled Corporation (GOCC) and GovernmentFinancialInstitution(GFI),ProvidingSeparationBenefitsfor Its Officers and Employees, Appropriating Fundstherefore and for Other Purposes,” where HB 2867proposes the abolition of certain GOCCs and GFIs,includingthreesubsidiariesofDBP(DBPManagementCorporation; DBP Leasing; and DBP Data Center), adiscussion ensued after we submitted our positionpaper to the Committee in 2011. As a result, it wasdecidedthatDBPDataCenterandDBPLeasingwouldbe removed from the list in the HB because of theircomplementary functions and activities in supportofDBP.

As part of our share in the Administration’s thrust oftrimming down the bureaucracy, we will evaluate thedissolutionoftheDBPManagementCorporationuponfulfillment of the commitments regarding MillenniumChallenge Account (MCA) and Remittance Centeroperations.

We also participate in industry associations such asthe Bankers Association of the Philippines, the BankersInstitute of the Philippines, and the Asian BankersAssociation,whichhelpshapepolicyandcraftprogramsthroughinputstoBangkoSentralngPilipinassurveys.

We actively served as transaction adviser for severalkey Public-Private Partnership (PPP) projects of theNational Government, providing assistance to theDepartmentofPublicWorksandHighways(DPWH)andtheDepartmentofTransportationandCommunications(DOTC). Specifically, we assisted in structuring andtendering the following PPP Projects: NAIA ExpresswayProjectoftheDPWH;LRT1CaviteExtension,Operationsand Maintenance Project of the DOTC and the LightRail Transit Authority; LRT2 Extension, Operations, and


MaintenanceProjectoftheDOTCandLRTA;andthePortof Davao – Sasa Wharf Modernization, Operations andMaintenanceProjectoftheDOTCandthePhilippinePortsAuthority.

We also participated in the National Renewable EnergyBoardasmemberoftheBoardandconveyedourinputsparticularlyontheassignabilityoftheRenewableEnergyPayment Agreement (REPA). The REPA is a pro-formacontract between the Feed-in Tariff Allowance (FIT All)AdministratorandtheRenewableEnergyDeveloper.Theassignability of the REPA contract is important for thebankabilityoftherenewableenergyprojects.

We contributed to the updating of the PhilippineDevelopmentPlan(PDP)2011-2016ResultsMatrixandthe Philippine Investment Plan (PIP). We submittedinputstotheSubcommitteesonFinanceandIndustryand Services under the Economic DevelopmentPlanningCommitteeofthePDP,all in linewithsectoroutcomes of a resilient and inclusive financial system

(Finance) and a competitive Industry and Servicessectors (IndustryandServices).Ourmandate,mission,andvisionaretranslatedintoorganizationaloutcomes:(1) Enhanced access to development loans andinvestmentsinsupportofcriticalindustriesandsectors,particularlyinthecountryside;and(2)Improvedaccessto quality banking services and financial products foragricultural,industrial,SMEsandindividualenterprises.Toattaintheabove,theBank’smajorfinaloutputsare:Loans and Investment Products and Services; DepositProductsandServices;andOrganizationalEffectivenessandFinancialViability.

The Bank also supports the national government’scommitment to the Millennium Development Goals(MDG).ThroughourDBPForestProgram,wecontributedtotheMDG1(Eradicateextremepovertyandhunger)byprovidingincometo4,782farmer-beneficiariesinvolvedin the land preparation, planting, and maintenanceof about 4.13 million varied seedlings planted in4,329 hectares in various project sites as of December


2012. Indirectly, we helped contribute to the primaryeducationMDGthroughthefinancingofprojectsthatgenerated 122 classrooms and 36 school facilities in2012.Financialassistancewasalsoextendedtohighereducation through the DBP Higher Education LoanProgram for Students, which can support 500 to 700deserving indigent scholars throughout the country,regardlessofgender,annually(MDGs2:Achieveprimaryeducation; and MDG 3: Promote gender equality andempowerwomen).

In terms of MDG 4 (Reduce child mortality), MDG 5(Improve maternal health), and MDG 6 (Combat HIV/AIDS, malaria and other diseases), our SustainableHealth Care Investment Program has helped fund45 hospital projects nationwide and supports DOH’scampaign of encouraging facility-based delivery forpregnant women. The projects also contribute inintensifyinghealthcareserviceslikeearlydiagnosisandtreatmentofnon-communicablediseases.

DBP’sGreenFinancingProgram(GFP)directlysupportsMDG 7 (Ensure environmental sustainability) byassistingpublicandprivatesectorsachieveproductionefficiency, global competitiveness in the fast-growinggreen markets, and compliance with environmentallaws and regulations. Apart from funds, GFP alsoextends technical assistance to projects in integratinggreen processes and technologies in their operations.In 2012, financing activities under the EnvironmentalDevelopment Project included: 16 projects in theindustrial pollution control sector (P1,982 million), 17projects in solid and hazardous waste management(P1,296 million), four projects in renewable energy(P1,956 million), and 10 projects in water supply andsanitation(P1,317million).Thisamountedtoatotalof47projectsworthP6,551million.

Indirectly, the Bank contributed to MDG 8 (Developa Global Partnership for Development) in 2012 bysupportingagribusinessthroughthereleaseofP202.21million for the agriculture and agrarian reform sector,

specifically addressing food security, rice stability, andruralincome;and,underinfrastructureandlogistics,thereleaseofP2.579billion,P200million,andP94million,specifically for road projects, container vessels forprivateshippingcompanies,andtheconstructionof10ROROvessels,respectively.TheBankalsoestablishedtheCountrysideElectrificationFinancingProgramto coverseven electric cooperatives at P2.5 billion in 2012, andis targeting to contribute at least P7.91 billion in theinvestmentrequirementofthecountryupto2018.

Finally,weadheretotheIntegrityPledge,aformalandconcrete expression of commitment by companies toabide by ethical business practices and to support anational campaign against corruption. We became asignatory in 2012, firmly committed in upholding thehigheststandardsofethics inallourtransactions,andbelievinginsecuringprofitattheexpenseofintegrityisanunacceptableandunsustainablewayofconductingbusiness. The Bank also adopted the Unified Codeof Conduct for Business to further institutionalize astandard of ethics throughout our operations, guideemployees in all transactions and the support for thenational campaign against corruption, and promotehonesty, transparency, and fairness in the businesscommunity.

Wedoall thesebecausewefirmlybelieve inPresidentAquino’swordsthat“goodgovernancepaysdividends.”We commit to our corporate values and the advocacyof sound governance principles and practices. Thiscommitment helps us to rise daily to the challenge ofpromoting ethical business practices and supportingthepresentadministration’snationalcampaignagainstcorruption as a means of promoting truly lastinginclusivedevelopment.


Our Stakeholders: At The Heart of our Sustainability Agenda

As custodians of financial products andservices geared toward assisting criticalindustries and sectors— and thereforea major player in the challenging task ofnation-building—we recognize that our

wide reach provides us with regular opportunities tocreate positive impacts on people, communities, andtheenvironmentateveryturnandwitheverydecisionthatwemake.

Wemakeitapointtoalwaysconsiderhowthepursuitof progress directly affects our stakeholders. Theconsultative nature of our relationship with themopensoureyestothevaluableperceptions,needs,andrealitiesthatshapeentrepreneurshipparticularlyinthecountryside, advance environmental protection, andbuild more productive communities. This is why wecommittoaddressingstakeholderissuesandconcerns.

shared success in shared spaces

Our Bank does not exist in a vacuum. We sharespaces with our stakeholders in everything we do. Wevalue interactions, therefore we initiate and sustainconstructive relationships with them, engagingthem at each and every level of public participation–information, consultation, involvement, collaboration,andempowerment.Weensuresharedsuccessthroughinformedparticipation,transparency,thefacilitationofstakeholdernegotiations,andcooperativeresolutions.

Forgingworkingpartnershipswithstrategicsectors,wehaveformulatedandimplementedspecificprogramsaspartofacomprehensiveframeworktospurprogressinvitalsectorsoftheeconomy.Weplaceparticularfocusonfourmajorareas: infrastructureandlogistics;socialservices;micro,smallandmediumenterprises;andtheenvironment.Weconsiderourmodesofinteractionwithour stakeholders important venues for interacting andfacilitatingdiscussionsregardingstakeholderpriorities,issues,andconcerns.

To continue working with our stakeholders, we alwaysstrive to have agreements where both parties benefitand are able to uphold their respective ends in goodfaith.Publicconsultationsonourproductsandservicesserve as valuable opportunities for reaching out,consulting, conversing, and inevitably incorporatingstakeholderconcerns intotheirevaluation,refinement,andimplementation.


Thetablebelowdetailstheindividuals,organizationsandcorporationsthatweworkwith.

our stakeholders

• Depositors

• Borrowers

• Investors (potential and existing)

• Local government units

Clients • Private corporations and businesses

• Financial institutions and banks

• Micro, small and medium enterprises

• General public

regulatorsand

policymakers

• National Government

• Department of Finance

• Bangko Sentral ng Pilipinas

• Philippine Deposit Insurance Corporation

• Anti-Money Laundering Council

• Civil Service Commission

• Bureau of Internal Revenue

• Commission on Audit

• Good Corporate Governance

• Other agencies

industryaffiliations

• Asian Bankers Association

• Association of Development Financing Institutions in Asia and the Pacific

• Bankers’ Institute of the Philippines, Inc.

• Bankers Association of the Philippines

• Bankers Council for Personnel Management

• Employers Confederation of the Philippines

• Makati Business Club

• Personnel Management Association of the Philippines

• Philippine Business for the Environment

• Philippine Chamber of Commerce and Industry

• The American Chamber of Commerce of the Philippines, Inc.

• University of Asia & the Pacific – Business Economic Club

• United Nations Environment Programme Finance Initiative

• Financial Executives of the Philippines

• Management Association of the Philippines


learning from the Ground: stakeholder voices in our initiatives

DBP recognizes the importance of collaborating withrelevantinstitutions,agenciesandclients.Weworkcloselywith key players from the private and public sectors incarryingoutourdevelopmentprogramsandinitiatives.Wegivestakeholdersavoice intheorganization,conception,implementation, and enhancement of our programsby tapping their expertise and incorporating theircontributions.

To ensure that we are attuned to the NationalGovernment’s development agenda, we also workclosely with regulators and policymakers on ourdevelopment programs. Firmly guided by theregulatory and legal frameworks being implementedby these national agencies, we successfully manageregulatory, implementation, and environmentalconsiderations into our comprehensive framework,

inclusiveofall stakeholdervoices.Asa result,wehaveearned the support of a network of allies over theyears in our campaign towards countrywide growthanddevelopment.

DBP’s programs, products and services function asprimary customer touch points that provide indicatorsof our continued responsiveness and effectiveness vis-à-visourdevelopmentmandate.Thus,wehaveopenedadditionalbranchesandweareoptimisticthatthiswillhelpbroadenourdevelopmentreachinidentifiedareasacrossthecountry.

Within the context of ever-evolving expectations,needs, and realities, we maintain and nurture lastingrelationshipsoftrustandintegritywithourstakeholders.Werecognizethattrustisthemostvaluablerenewableresource: it makes everything possible for all of usto work together happily and responsibly in ourpursuit of striking a balance between profitabilityandsustainability.


Below is a table that captures the essence of our exchanges with our stakeholders.

stakeholders key sustainability issues and Concerns DBp’s responsesGovernment

National government Dividends, policy compliance, economy-building

Bank ownership, government policies

Government regulators Policy compliance, payment of taxes, reportorial requirements

Networking, regulatory issuances, memos

Local government units Development financing, loan repayment, succession, partnership/ advocacy/ good governance initiatives

Loan transactions, development agreements, tie-ups, promotion of best practices in local governance

Bank ClientsDepositors, borrowers, investors (existing and potential), general public

Profit generation, service quality, client reach, business management, loan repayment, soundness of investments, financial advisory

Banking transactions, marketing blitz and business road shows, client survey, transactions

internal stakeholdersBank officers and employees, consultants, service personnel

Personnel development and growth, compensation program (monetary and non-monetary), work environment

Institutional events, in-house publications, intranet and email, memos, public address system, bulletin boards

professional and non-profit organizationsProfessional development organizations, accreditation companies

Professional recognition, accreditation advocacy, delivery of contracted services

Seminars, conferences, accreditation process, consultancy and outsourcing of services

Business partnersFunders Impact, capacity-building, project

sustainability, profits Developmental loans, technical assistance

Banks and other financial institutions

Geographic and client reach, business generation

Joint development agreements, joint ventures, tie-ups

International organizations Global Compact principles, core values and advocacies, sustainable development

Advocacy campaigns, statement of support, information sharing

media organizationsTelevision channels, radio stations, print media, wires, news services, online media

Public information, promotion, exposure Press briefings, news conferences, news releases, advertising, column feeds, networking, interviews

service firms, suppliers and ConsultantsAdvertising companies Promotion, identification, exposure,

reputation-buildingAdvertising campaign conceptualization, production, airing, publication

Events service providers Project/ activity implementation Conceptualization, production, implementation

Supplies/equipment suppliers Operations and logistics support Purchasing process


The Colors of Sustainable Development

P4.13Billion

economic value generated for 2012

P4.73BillionContributed to the National Government in the form of taxes and dividends.

947Millionprovided goods and

services to our suppliers in the form

of purchases.

Profit: Spurring Inclusive Economic Growth

DBP strongly commits to the mandate ofaccelerating growth and progress. Whilewe focus our efforts on contributingto nation-building, we make sure togenerate substantial gains to sustain our

development operations. We continued to generateincreasing economic value within the performance ofourkeyroleasanationaldevelopmentcatalyst.

Our net annual economic value generated for 2012reached P4.13 billion. This was a 4.95% markedimprovement over the 2011 figure of P3.94 billionperformance. It is due largely to a lower provision forlosses,alowerincometaxexpense,andahigherinterestincomeonUnquotedDebtSecuritiesClassifiedasLoans,aggregatingP1.25billion.

the growth we consistently attain every year continues to benefit our various stakeholders.


However,thesewereoffsetbytheslumpininterestfrominvestmentsandsecurities,actualtradinggains,foreignexchangeprofit,andtheestablishmentofaprovisionforlawsuits,leadingtoatotalofP1.14billion.

The growth we consistently attain every year continuesto benefit our various stakeholders. Our profitability in2012enabledustopayP2.48billioninsalariesandotherbenefits toouremployees,whoremainthekey force inensuringthatweprevailasaprofitableandsustainableorganization.Thismarkeda5.53%decreasecomparedto2011duetoearlyretirementofanumberofemployees.

WealsoprovidedP947milliontooursuppliersintheformofpurchasesofgoodsandservices, showinga1.18% increase compared to 2011, attesting to oursustainedpartnershipwiththosewhoassistusinourvariousoperationalrequirements.

Generating value sufficient enough to provide themuch-neededassistancetoourcommunity,wemadedonations and contributions amounting to P146million,includingthecontributionofP139.47millionto our centerpiece corporate social responsibilityinitiative, DBP Endowment for Education Program(DEEP).

An aggregate of P4.73 billion was contributed to theNationalGovernmentintheformoftaxesanddividends,exceeding last year’s contribution of P4.51 billion byP215million.

Thedistributionofourgeneratedeconomicvalueamongour various stakeholders, from employees to suppliers,community donations and government, is detailed inthetablebelow.

value DistriButeD to stakeholDers(In Million Pesos)

2012 2011 percentage (%)

Increase/(Decrease)

Employees Salaries and Wages 2,477 2,622 (5.53)

Suppliers Goods and Services 947 936 1.18

Shareholders Dividends 3,242 2,867 13.08

Government Taxes Paid 1,487 1,647 (9.71)

Community Donations & Contributions*

146 81 80.25

*excludesexpensesrelatedtotheconductofvolunteerworkandoutreachactivities,implementationoftheDBPForestProgram,andcontributions

totheAGFPandCSF

our Developmental impact

The Philippine government is pursuing a developmentplanthatisinlinewithitsviewofinclusivegrowth.Thisisdefinedas“sustainedgrowththatcreatesjobs,drawsthemajorityintotheeconomicandsocialmainstream,and continuously reduces mass poverty.” In line withthis, DBP seeks to accelerate economic developmentparticularlyinhighpotentialgrowthsectorsthroughtheprovision of medium to long-term credit, and leveragelimited public resources for infrastructure throughPublic-PrivatePartnerships.Wecontinuouslycoordinatewith concerned government and private agencies andinstitutions in establishing inter-agency partnershipsand identifying investment and developmentopportunitiesinourprioritysectors.

Ourongoingprogramsareall inlinewiththeNationalGovernment’s goals of helping in the developmentof inclusive countryside development. We were ableto release a total amount of P2 billion in loans toMSMEs in 2012, assisting a total of 139 individualentrepreneurs and 44 cooperatives, and providing jobsto5,128individuals.ThroughourinitiativesforMSMEs,agriculture and interconnection of communities, weexpect tohelpmore individualsandbusinessesaccessfunds as well as generate additional investments,employment,andnationalincomederivedfromtaxes.


a Bank for micro, small and medium enterprises (msmes)

MSMEs represent 99.6% of registered businesses inthePhilippinesandtheseareconsideredthebackboneof the Philippine economy. The MSME Center and theCredit Scoring System are two new support programsthatwedevelopedin2012tofacilitatelending,increasethe coverage of assistance, and better serve MSMEsnationwide.

TheMSMECenterprovidesawiderrangeofassistanceto MSEs in the form of technical assistance in thepreparation of their business plans as well as loanpackaging and processing.The Credit Scoring Systemis used to effectively evaluate loan applications toreduce credit risk and facilitate lending to the MSEs.A product of our collaboration with Innovations forPoverty Action, a US-based organization devotedto providing solutions to worldwide problems, theDBP MSME Credit Scoring System is automated andcustomizedtotheneedsoftheBank’sMSEclients.

In2012,loanreleasesundertheRetailLendingProgramforMicroandSmallEnterprisesincreasedby12%fromP500.4millionin2011toP560.02millionin2012.Loans

providedtoindividualMSMEsthroughretailamountedto P1.89 billion for the year 2012. The loans assisteda total of 139 entrepreneurs and generated 4,410additionaljobs.

Expandingsupporttocountrysidedevelopmentthroughcooperatives is our Sustainable EntrepreneurshipEnhancement and Development Program (DBP-SEED).Through it, we uphold the national government’sinclusivegrowtheffortbecausewemaximizetheBank’slending reach by means of income and employmentgenerationinthecountryside.Wealsohelpenhancetheaccess of MSMEs to credit facilities and fast-track theprovisionofcreditandcapitalassistancebyfacilitatingthecreditprocessthroughthereductionofdocumentaryrequirementsandturn-aroundtime.

The DBP-SEED Program has the following initiatives:Retail Lending for Micro and Small Enterprises, SEEDOrganic Agriculture Program, SEED High Value CropsFinancing Program, SEED Cleaner Public TransportProgram, SEED One Town One Product, SEED CreditSurety Fund Credit Facility, and SEED Venture CapitalProgram. Through the implementation of alternativewaysofsecuringMSME loans,webringMSMEstothemainstreamofbanking.


total loans approved, total loans released and number of msmes assisted(retail lending)

for the period January-December 2012

RMC No. of Accounts Total Approved Loan Amount

Releases Jobs Generated

Northeastern Luzon 31 90,850 173,356.00 325

Western Luzon 3 3,000 28,380 16

Central Luzon 19 94,039.01 288,438.23 527

Metro Manila 9 66,250 153,478 764

Southern Tagalog 11 72,353.33 206,771.30 168

Bicol 5 6,170 59,873.15 59

Eastern Visayas 7 7,100 124,027.70 129

Central Visayas 4 41,750 101,590 123

Panay 14 31,146.60 64,304.23 332

Negros 2 10,250 44,022.24 28

Northern Mindanao 9 52,250 261,404 623

Northeastern Mindanao 4 34,800 196,755.29 395

Southern Mindanao 2 6,100 21,864.19 510

Southeastern Mindanao 4 3,700 61,306 123

Western Mindanao 15 89,040.44 106,860 288

total 139 608,799.38 1,892,430 4,410

OursupportofMSMEsextendstoourcooperationwiththeBangkoSentralngPilipinasthroughitsbrainchild,theCredit Surety Fund (CSF) Program. We are the first andonlyfinancialinstitutionwithacreditwindowexclusivelyforCSFmembers,knownas theDBP CSFCreditFacility,through which qualified cooperatives and NGOs mayapplyforloanseitherforrelendingtotheirmemberswhoneedfundingfortheirbusiness(wholesale)ordirectlyforthecoops/NGOsownentrepreneurialbusinessactivities(retail).Inthesamemanner,theirmembersmaydirectlyapply for loans in the form of credit lines for workingcapital,andtermloansforbusinessexpansionintheformof building construction or improvement, acquisition ofmachineryandequipment,orpermanentworkingcapital.

In2012,weapprovedatotalofP241.542millionfor65accountsasalendertoqualifiedCSFmembers,P129.718million of which were released to 44 borrowers andgenerated 718 jobs. Fifteen accounts worth P52.447million remain in the pipeline. As one of the TrusteeBanks for this program, we generated trust depositsaggregatingtoP169.288millionfromtheseCSFs.

The Bank also helps cooperatives in capacity buildingsuch as loan evaluation, loan processing, and loanapprovalsbasedonDBPcreditrequirements,evaluationstandards,accounting,andriskmanagement.Through

DBP-SEED, we help more micro-entrepreneurs expandtheir businesses, and consequently generate moreemploymentopportunities.


ThefollowingtablehighlightstheBank’sperformanceascontributortovariousCSFsestablishednationwidein2012.

Credit Surety FundNo. of

Participating Coops/NGOs

Date of Launching

Amount Approved (PMillion)

Amount Released (PMillion)

1 Cavite CSF 20 9/27/2008 4.55 4.45

2 Aurora CSF 11 1/20/2009 2.5 1.4

3 Bohol CSF 17 2/15/2009 1 1

4 Negros Oriental CSF 15 2/15/2009 1 1

5 Compostela Valley CSF 23 7/31/2009 1 1

6 Davao del Norte CSF 21 7/31/2009 1 1

7 Iloilo CSF 11 8/26/2009 1 1

8 Negros Occidental CSF 11 9/22/2009 1 1

9 North Cotabato CSF 18 10/9/2009 1 1

10 Davao Oriental CSF 3 10/9/2009 1 0.85

11 Cebu City CSF 17 10/16/2009 5 5

12 Albay Mayon CSF 15 8/12/2010 1 1

13 Dipolog CSF 9 10/5/2010 1 1

14 Oriental Mindoro CSF 13 8/17/2011 1 1

15 Mindoro Occ. CSF 22 11/15/2010 1 1

16 Pangasinan CSF 12 5/3/2011 1 1

17 *Bulacan CSF 1

18 *Romblon CSF 1

19 South Cotabato CSF 10 5/31/2011 1 1

20 *Northern Mindanao CSF 1

21 Benguet CSF 17 8/31/2011 1 1

22 Baguio CSF 7 11/5/2012 1

23 Sarangani Province CSF 21 11/22/2011 1 1

24 Puerto Princesa CSF 10 1/17/2012 1

25 Capiz CSF 20 03/07/2012 1

26 General Santos City CSF 15 05/16/2012 1

27 Davao City CSF 21 07/11/2012 5

28 Palawan CSF 12 08/22/2012 1

29 Laguna CSF 15 08/28/2012 1

totals 386 42.05 26.7

*Forlaunching


financing agribusiness in aid of Countryside Development

In compliance with R.A. No. 10000 or “The Agri-AgraReform Credit Act of 2009,” we contribute to buildingproductivecommunitiesinthecountrysideandassistingin rural development. Specifically, we provide lendingassistancetotheagriculture,forestryandfisherysectors,and community and agri-based alternative businessand technology incubators for potential grassrootsentrepreneurs.

In June 2012, our Board of Directors approved the“Agribusiness Development Program (ADP)” CreditFacility, which coincided with the full implementationof the Agri-Agra Law. The ADP allows us to complywith the mandated 25% allotment of the total loanportfolio to borrowers from the agriculture sector.Banks, microfinance institutions, non-governmentorganizations, cooperatives, financing companies,and farmers or fisherfolk associations can apply forwholesaleloans.

By providing agri-based entrepreneurs with accessto loans with an initial allocation of P5 million, wefinancedthepromotionofagribusinessforcountrysidedevelopmentthroughthetransformationoffarmlandsandidle lands, includingDAR’sdistributedagri-lands,into agribusiness enterprises. To us, this is a crucialstepintheeradicationofextremepovertyandhungerinthePhilippines.

ADP also enables us to assist in the development ofhigh-value commercial crops and to promote organicagriculture to enhance global competitiveness,environmental integrity, food security, self-sufficiency,andtoincreaseproductivityforlocalandexportmarkets.

ADP applies to all agricultural loans, includingproduction, post-harvest, agri-processing, marketingor the whole value chain under our retail lending orre-lending to small farmers and fisherfolk under ourwholesale facilities. Also eligible for funding are allagribusiness projects, including but not limited topriority crops under the DBP High Value CommercialCrops and Organic Agriculture Programs, as well aspoultry and livestock; and to investments in bio-fuelfeedstock projects, production of organic products, orthewholevaluechain.

Connecting Communities through transport infrastructure

In2012,weearmarkedP22-billionfortheConnectingRural and Urban Intermodal Systems Efficiently(CRUISE) program, increasing our assistance to thetransport and logistics sector. CRUISE is an umbrellaprogram that supports investments to improve thePhilippines’ primary transport infrastructure andlogisticsfacilitiesbyprovidingaffordable,reliable,andsafemasstransportsystems.

Withprojectsrangingfromroads,packaging,transport,and distribution facilities to cold chain facilitieslocated in Isabela, Nueva Ecija, Bataan, Batangas,Sorsogon, Cebu, Negros Oriental, Negros Occidental,EasternSamar,AgusandelNorte,AgusandelSur,andSurigaodelSur,ourCRUISEprogramalsosupportstheefficientmovementofbasiccommodities,decreasingthe costs of goods and services in the process. Italso introduces sustainable storage, handling, anddistributiontechnologies.


investments in the utility sector

Energysecurityandwateraccessarebasichumanrights.The exclusion of many from basic needs, particularlyto electricity and water, have staggering effects onthe quality of human life.Thus, the government mustfacilitatetheirprovisionacrossalleconomicclasses.AtDBP,wecreate,facilitate,andmediateopportunitiesforaccessasourwayofpromotinginclusivedevelopment.

electric power. Fully appreciative of the vital rolethat electric cooperatives play in rural developmentand electrification, we established the CountrysideElectrificationFinancingProgram(CEFP)inJuly2012.

As our way of supporting the government’s targetof 90% household electrification nationwide, CEFPprovides adequate, affordable, and reliable energysupply through power generation (both conventionaland renewable energy) and distribution projects ofelectric cooperatives. Specifically, it aims to improvethe operational efficiencies of electric cooperatives,increaseaccesstoelectricityservicesintheruralareas,and help contribute in the global effort of mitigatingclimatechange.

Thoughstillinitsinitialoperationin2012,CEFPalreadyhas several projects in the pipeline covering sevenelectric cooperatives that are all under evaluation,proofofthegraveneedforfinancialassistanceinthissector. Projects funded cover upgrading, expansion,

rehabilitation of distribution systems, working capitalto avail of the prompt payment rebate on power billsand renewable energy development. The investmentsare expected to reduce systems loss, increase accessto electricity services, generate savings on generationcharges, and comply with the Philippine DistributionCode.

Towards the end of the year, our total loan portfolioamounted to P1.578 Billion, covering 18 ECs and twoprivate distribution utilities with funding from JICAEnvironmental Development Project, World Bank RuralPower Project and DBP’s internally generated funds.CEFP seeks to contribute at least P7.91 Billion in theinvestmentrequirementupto2018.

As one of the first countries in South East Asia tohave a comprehensive legal framework promotingrenewable energy development as early as 2008, thePhilippines has long waited for its implementation,which happened only in July 2012 when the long-awaited feed-in-tariff rates were finally approved bythe Energy Regulatory Commission. Immediately, weadded three renewable energy projects (two hydroandonewindpowerprojects)inourrenewableenergyportfolio, which resulted in an increase in the totalrenewableenergycapacityfrom177.40MWto240.89MW for a total loan amount of P9.562 billion. Fromthese RE portfolio, one mini hydropower project wascompleted the same year, and was inaugurated byPresidentAquino.

Thefollowingtableshowstherenewableenergyadditionalcapacityandtheestimateddevelopmentalimpacts.

Developmental impacts as of 2011 as of 2012

Additional Capacity (MW) Hydropower 150.36 147.91

Biomass 26.9 17.00

Wind 0.18 0.18

Solar - -

Estimated Barrels of Fuel Replaced 1.23 Million 1.01 Million

Estimated Tons of CO2 Equivalent Avoided 476,978 415,390

Estimated FOREX Savings (US$) 29.70 Million 14.23 Million

Estimated Government Savings (Php) 34.20 Million 9.20 Million


Another source of energy can be found in bio-fuels. In2012, the San Carlos Bioenergy, Inc. (SCBI) completedthe expansion of their bioethanol production plant’swastewater treatment facility. Based on January toSeptember 2012 operations, the plant was able toproduce 18,151,906 liters of bio-ethanol and exported3,251,576kWhofelectricitytothegrid.

Water supply and sanitation. We launched projectsto bridge the gaps as identified in the PhilippineDevelopmentPlan2011-2016,PhilippineWaterSupplyRoadmap, and the National Sewerage and SeptageManagementProgramin2011.TheFinancingProgramfor theWater Sector targets about P5 billion worth ofinvestmentsuptoyear2016topromotetheprovision

of safe and potable drinking water in support of theachievementoftheMDGTargetofcuttingtheproportionofthepopulationwithoutaccesstosafedrinkingwaterandsanitationservicesbyhalf.

The Philippine Water Revolving Fund had a total of14 water supply projects with a total loan amount ofP1.42billionthatwasapprovedbytheBank,morethandoubletherecordednumberfromthepreviousyear.Asof December 2012, the total loan exposure of DBP inthe water supply and sanitation sectors stood at P9.74billion,comprising8.16%ofDBP’stotalloanportfolio.

The table below shows the breakdown of the P749.60millionalreadyreleased:

type of Borrower/ Client number of Borrower/ Client - account

total loan amount (in million php)

total loan proceeds/ releases (in million php)

Water Districts 8 524.45 413.67

LGUs 4 130.87 38.58

Private Companies 2 762.35 297.35

total 14 1,417.67 749.60


We also provided financial assistance for thedevelopment of new water sources and rehabilitationofexistingfacilitiesanddistributionlinesofthreewaterdistrictsinLuzon,namely:BalangaWaterDistrict,CityofSanFernandoWaterDistrictand IlaganWaterDistrict;two clients in the Visayas Region, namely: the LGU ofMoisesPadillainNegrosOccidentalfortherehabilitationof its distribution lines, and the province of SouthernLeyte for a program to increase service coverage; andone in Mindanao, namely Valencia City Water Districtin Bukidnon for the rehabilitation of its water supplysystemfacilitiesanddevelopmentofnewwatersources.

Numerous water and sanitation projects are still linedup as we remain true to our commitment to supportenvironmentalprotectionandpublichealthasameanstocommunitydevelopment.

Throughoutoursocialresponsibilityinitiatives,weofferexcellent service to our customers and stakeholders.Our constant efforts toward continuous improvementhave helped us achieve steady growth in our portfoliobase while being in line with our continuing mandateofpromotingthenationaldevelopmentagendathrougheffortscorollarywithgovernmentactionplans.


Planet: Growing Sustainable Futures

Asthe“BankfortheEnvironment,”wecommitto environmental protection as a path tosustainabledevelopment.Wehaveastrongenvironmentalpolicythathelpsusidentifyand guide the means and procedures to

safeguard our communities and their resources in thecourseofourbusiness.OurEnvironmentalManagementSystem (EMS) measures our daily impacts and letsus conserve resources by means of energy and fuelefficiency, water conservation, and waste segregation.

Throughit,weintegrateandimplementenvironmentalconsiderations into all aspects of our operations andservices,assetmanagement,andbusinessdecisions.

To intensify environmental sustainability indevelopment financing, we conceptualize, implement,and review products and services along identifiedsignificant environmental aspects, objectives, andtargets.Weencourageclientstopursueenvironmentalprotection and pollution prevention through ourlending and technical assistance programs, and adoptenvironmental management practices, includingenvironmentalduediligenceinquiryinriskassessmentand management. To promote compliance in theseregulated establishments, we collaborate with theEnvironmentalManagementBureauoftheDepartmentofEnvironmentandNaturalResources.Thisisespecially


crucialinthecountryside,whichisgenerallydesignatedfor agriculture and forestry and is considered mostvulnerabletotheeffectsofclimatechange.

We ensure that all employees at all levels are awareof and actively involved in the Bank’s environmentalprograms through appropriate training andinformation. We provide training and technicalassistance to boost institutional support in the areasof human development, technology transfer, andenvironmentalprotection.

To ensure the continuing effectiveness of ourEnvironmental Management System, we conductannual reviews, measurements, and internal andexternalauditsofouroperations.Similarly,weconductannualtermloanreviewsoffinancedprojectstocheckon the credit position of our borrowers and validatetheir compliance with the environmental and socialsustainabilityconditionssetforthintheagreement.

Green financing and the environmental impacts of products and services

Our Green Financing Program (GFP) supports thePhilippine Development Plan’s objective of a cleanerand healthier environment by enabling industries andlocalgovernmentunitstoengageincleanerproduction,waterconservation,properwastemanagement,energyefficiency,amongothers.Itisdesignedtoassistprivateand public sectors in achieving production efficiency,global competitiveness in the fast-growing greenmarkets,andcompliancewithenvironmentallawsandregulations.

GFP extends both funds and technical assistance toprojectsthatintegrategreenprocessesandtechnologiesin their operations. We target industry groups in themanufacturingsector,buildingandconstructionsector,andtransportsector,aswellaslocalgovernmentunits(LGUs) planning to embark on solid waste, sanitation,efficient lighting projects and electric vehicles ascandidatesfortheGFP.

To ensure GFP’s success, we partnered with fourinstitutions: the European Chamber of Commerce inthePhilippinesforprogramassistance;theAssociationof Development Financing Institutions in Asia and thePacific for the training of clients in green operations;Asia Society for Social Improvement and SustainableTransformation for joint promotional activities andidentificationofpotentialprojectsforfunding;andtheEnvironmentalManagementBureauoftheDepartmentofEnvironmentandNaturalResourcesforguidanceoncompliance.

Wealsolaunchedapublicpromotionofenvironmentalstewardship and campaign among partner industriesandundertookinternaleffortstotransformthemindsetofourownpersonnel.Specifically,weproducedmanualsand established guidelines such as the EnvironmentalDue Diligence and the Environmental PerformanceMonitoring manuals for our staff. Industry sectorguidelines that would help identify green investmentswere also developed, and this later led to the creationof several policy-based credit facilities accessible toindustries, local government units and governmentcorporations.


Our efforts to integrate and promote environmentallendingprogramssucceeded.Bytheendof2012,atleast20briefingshadbeenconductednationwidetopromoteand market GFP, which covered projects on renewableenergy, biofuels, water supply and distribution,Philippine Water Revolving Fund, waste managementandpollutioncontrol,RegionalInfrastructureforGrowthProject,andruralelectrification.Ourmanufacturing-andservice-sectorclientshavealreadybeguntoincorporateecological considerations in their project planning andimplementation beyond the level of compliance withregulatoryrequirements.

the DBp forest program for social responsibility and environmental stewardship

Massive deforestation has caused rural and uplandcommunities to experience tragedies that are actuallyavoidable if only measures to conserve and maintainnaturalresourceshadbeenimplemented.Suchwasthebeginning for the DBP Forest Program, conceptualized,developed,andlaunchedin2005afteramajortyphooninQuezonkilledmanyanddamagedpropertiesin2004.

Our Forest Program provides non-credit partnershipinitiative with different communities to protect andrestoregreencoverincriticalforestsitesandwatershedsthroughtheplantingofhigh-valuefruittrees,foresttrees,and other useful species like mangroves, bamboo andilang-ilang, while also helping address soil erosion andreduceeffectsofcarbonemission.TheProgramalsoseekstodevelopsustainabledownstreamindustriesintheruralareas especially when fruits and intercrops are alreadyharvestable.While harvest from intercrops serve as the

andplantedon,benefitting4,782farmers.Atotalof4.13milliontreeseedlingshavebeenplanted,withanaverage73%survivalrate.

TwoprojectswereaddedtotheForestProgramin2012:thepartnershipprojectwiththeDr.EmilioB.EspinosaSr.MemorialStateCollegeofAgricultureandTechnologyinMandaon,Masbate;andtheForsihama-CBFMAssociationinBongabong,OrientalMindoro.Bothaimtorehabilitatecritical watersheds: the Mabigo Watershed in MasbateandtheBongabongWatershedinOrientalMindoro.

TwoforestprojectsinMarilogDistrictinDavao(BalikatanandUKAFA)alreadybenefitfromthesaleandprocessingof cacao into chocolate chips or tablea and the harvestof rambutan and durian.The forest partnership projectwith Cagayan State University (CSU) already achievedtheceremonialharvestofmangoes,withtheschooland

immediatesourceofincomeforfarmers,otherlivelihoodopportunities also emerge such as vermin compostingandseedlingraising.

At present, our Forest Program has 40 forest projectsin varying stages of development, with forest partnercommunities already benefitting from the harvest ofhigh-value fruits and crops. It has been established indifferent parts of the country for the development of6,754.77hectaresoflandareainpartnershipwithpeople’sorganizations, LGUs, state universities and colleges andgovernmentownedandcontrolledcorporations(GOCCs).AsofDecember2012,about4,329hectaresor64%oftheapproved area for development were already cultivated



SMMVSAMMAK

TIBMAD

IMBO

PMSOA

TCA

PLGUBulacan

KIMAMABAMABA

PLGUOcc.Mindoro

FORSHIMAWVSU

PLGUGuimaras

PCSD

PSU

CagayanStateUniversity

PLGUCagayan

LGUBanaue

PLGUAurora

PLGUNuevaVizcaya

BambangFruit&VegetableGrowersMPC

BFARMAIMSWMC

MASAGKA

UPLosBañosUPLosBañosExpansion

PLGUMarinduque

DEBESMSCATCFDC

LGUGamay

VSU/LGUPalompon

VSU/LGUIsabel

LGUAlbay MTCCCI

LGUTagumCity

DOSCST

UKAFA

BALIKATAN

PLGUSarangani

PLGUSarangani(Expansion)

DBp forest location mapAs of Dec. 31,2012

DBp funding assistanceP125.61Million

po - 16lGu - 14suC - 9oGa - 1 ..... 40

luzon - 25visaYas - 8minDanao - 7

6,754.77 hectares25Upland -6,324has.15Coastal -430has.

planted area4,329.03has.

leGenD

UPLAND

COASTAL

farmer beneficiaries now profiting from the sale of theshared harvest. Palawan State University has alreadyharvested abaca, now being processed into abaca fiberfor sale in the market. DBP also has forest partners inthe Provincial Governments of Sarangani, Aurora, andCagayan,wherethetreeshavebeguntobearfruits.

The development of these forest projects enhances theenvironmental conditions in the area and also directlybenefits participating farmers, who not only earn butalsolearn.Improvementsinclimate,airquality,landscapeandgreeningoftheareaareevident,whilethetreesalsoeventuallyhelpreducesoilandcoastalerosion,improvewatersupplyandquality,andpromotebiodiversity.Themangrovesimprovespawninggroundsforterrestrialandmarineaquaticlife.

Partner agencies conduct training sessions for farmerson conserving and protecting the environment. Thesetraining sessions cover the necessity of conserving

and protecting the environment, kindling a sense ofcommitment in the project, increasing interaction andcommunication among members of the community,and improving skills in forest project development.We conduct project monitoring through regular visits,meetings with partners, and assessment of projectimplementation and concerns. Forest partners do theirshare by also monitoring and documenting data, withparticular focus on projects that are already capable ofremitting revenue generated from the sale of harvestsandproductsborneofthepartnershipproject.

Recognizing the existing demand for financing treeplantation projects, the DBP Forest Team continues toventure into the development and implementation ofmore initiatives through the newly created DBP TreePlantation Financing Program, with Operating PolicyGuidelinesapprovedbyourManagementCommitteeinitsResolutionNo.0053datedApril10,2012.


Feature Story: DBP Celebrates a Decade of Living an Environmental Ethic

We have been able to conserve energy, reduce transport fuel use, minimize water consumption, and scale down the volume of waste disposal.

100,587cu.m

Reduced GHG emission of

165 MT

from reduced consumption of 4,928,968 kWh

Reduced GHG emission of

2,510 MT Use of LPG for transport fuel vs. gasoline

Operation time for air-conditioning (AC) units,

lights, & elevators

Regular checking for water leakages & Installation of Waterless Urinal and Sensor

Lavatory faucets

Reduced consumption of


Theharshrealityoftheenvironmentalimpactswrought by irresponsible consumptionand production increasingly receivesconsiderable attention year after year. Assuch,consciousnessfortheenvironmenthas

alsogainedsubstantialvalue.

The global consensus concerning the necessityof an environmental ethos—where we all mustact responsibly and with accountability to futuregenerations—has been quickly mounting and canno longer be ignored. Campaigns and clamors formore earth-friendly and environmentally responsibleproduction and service practices have promptedenterprises the world over to reflect on their valuechainandtakestockofwhatgoesintotheirecologicalfootprint.

Progressive management teams have begun to adoptwhatenvironmentalistsandsocialjusticeactivistshavelong endeavored to advance to achieve sustainabledevelopment: the triple bottom line (people, planet,andprofit),ortheaccordanceofequalconsiderationtoeconomics,socialequity,andenvironment.

DBP is one of these progressive institutions, and wemark our 10th year of embracing an EnvironmentalManagementSystem(EMS).

hoW We pioneereD Green BankinG

Financial institutions are not commonly expected toadoptanEMSduetotheminimal impacttheirofficesmay have on the overall consumption of resources forproduction. Nevertheless, as the country’s premierdevelopmentfinancialinstitution,itisincumbentuponus to make sure that when we accelerate sustainableeconomicgrowth,wedosowithaslittleimpactontheenvironmentaspossible.

Our EMS enables us to successfully translate andintegrate a responsible environmental strategyconcretely into our processes and practices, ensuringeffective and efficient operations while significantlyreducing our environmental impacts and setting atrend for the financial sector. We have embedded ourenvironmentalmanagementprinciplesnotonlywithinthebank,butalsointoourproductsandservices.

Thus,webecamethefirstPhilippinebanktoreceiveaninternationalcertificationforourEMSunderISO14001standardsin2002.Today,ourEMScertificationcovers49branches,including15RegionalMarketingCenters,andwe are currently working to include 33 more branchesintoourEMScertificationby2013.

WhY GoinG Green is GooD

A decade of EMS implementation under the stringentstandards of ISO 14001 has brought considerableprogress to our internal environmental managementcompetence. We have been able to conserve energy,reducetransportfueluse,minimizewaterconsumption,and scale down the volume of waste disposal. Ourinitiatives to help save and conserve the environmenthave translated into total savings of P18.7 million forthe Bank. Along with the rewarding environmentalinitiatives and positive environmental and economicsresults,weenjoyacleanbilloftriple-bottom-linehealth,receivingnofinesorsanctionsfornon-compliancewithenvironmentallawsandregulations.

Internal environmental management has resulted inthe reduction of costs through the improvement ofoperationsandefficientenergyconsumption.

The table summarizes the significant reduction inour general consumption of electricity, water, fuel,andpaperwithinthedecadeofEMSimplementation.Thefigureshavedroppedconsistentlyconsideringourexpansion in efforts to better serve and reach moreFilipinos,particularlyinthecountryside.


environmental management programs & practices environmental BenefitsBusiness Benefits(savings in php)

energy conservation

• Reduced operation time for air-conditioning (AC) units, lights, & elevators

Reduced GHG emission of 2,510 MT from reduced consumption of

4,928.968 kWh9,441.926

• Thermostat setting of AC units to required working temperature of 25°C

• Auto shut-off setting of PC monitors when idle for 20 minutes

• Light retrofitting

use of lpG for transport fuel vs. gasoline reduced GhG emission of 165 mt 1,431,296

Water Conservation

• Regular checking for water leakages Reduced consumption of2,319,710• Installation of Waterless Urinal and Sensor Lavatory

faucets100,587 cu.m

Waste segregation

• Sale of recyclable wastes Reduced volume of wastes disposals

990,860

total savings 18,788,527

GHG Emission Factor:

Electricity = 0.5093 kg CO2

/kWh, Luzon and Visayas grid using UNFCCC Methodology with IPCC defaults (2008-2010 data)

LPG Fuel = 1,530 grams CO2

/liter; Gasoline = 2,340 grams CO2/liter

2012 2011 2010 20092002-2008

averageElectricity Consumption (kWh) Head Office 5,570,533.00 5,623,486.11 5,459,017.00 4,970,000.00 5,666,499.99 Branches 5,317,075.82 5,444,976.55 5,642,031.03 total electricity consumption 10,887,608.82 11,068,462.66 11,101,048.03 Water Consumption (cu.m) Head Office 36,645.00 40,036.00 31,853.00 30,051.00 42,499.29 Branches 67,980.64 66,765.98 68,466.17 total water consumption 104,625.64 106,801.98 100,319.17 Fuel Consumption- Business Travel (liters) Head Office 99,436.03 106,647.23 116,875.39 110,675.26 127,408.09 Branches 308,288.02 302,123.24 356,191.54 total fuel consumption – business travel

407,724.05 408,770.47 473,066.93

Paper Consumption (kg) Head Office 38,057.70 37,295.50 39,139.90 60,793.00 75,881.94 Branchestotal paper consumption 38,057.70 37,295.50 39,139.90 60,793.00 75,881.94GHG Emissions (MT) Indirect emission (electricity)

5,503.51 5,613.07 5,675.92

Direct emission (fuel – business travel)

1,017.46 1,019.41 1,189.46

total GhG emissions 6,520.97 6,632.48 6,865.38


BANKWIDE GHG EMISSIONS

IndirectGHGEmissions(electricity)

DirectGHGEmissions(fuel-businesstravel)

TotalGHGEmissions

mt

7,000

6,000

5,000

4,000

3,000

2,000

1,000

2010 2011 2012

TheenvironmentalfootprintofourHeadOfficeforthepastthreeyears(2010–2012)remainedlowerthanthe2002–2008 average consumption despite additionalelectricity and water used in the DBP canteen locatedin the two-storey annex of the Head Office building.Similarly, paper and fuel consumption for businesstraveldecreaseddespiteaddedbusinesstargets.

These reduced figures show how environmentalstrategy has grown embedded in our daily practices

and processes, turning individual accountability intoa corporate culture and compelling our people tointernalizeandliveoutanenvironmentalethic.

Fulfillingourobligationtominimizethe impactofouroperationsontheenvironment,weproudlyregardourenvironmental footprint as proof of the compatibilityof economic progress and social responsibility withenvironmentalconsciousness.

reduction in paper consumption

over 10 years(Head office)

213,439 kWh reduced over three-year period

2010

2011

2012

65,342.88 liters of fuel saved over three years

20102011

2012


liters/kilograms

140,000

120,000

100,000

80,000

60,000

40,000

20,000

TRANSPORT FUEL & PAPER CONSUMPTION HEAD OFFICE

2002-08 2009 2010 2011 2012

Transport Fuel Consumption (liters)

Paper Consumption (kg)

kWh

5,700,000

cu.m/liter

400,000

350,000

300,000

250,000

200,000

150,000

100,000

50,000

5,600,000

5,500,000

5,400,000

5,300,000

5,200,000

5,100,000

ENVIRONMENTAL FOOTPRINT (81 Branches)

2010 2011 2012

ElectricityConsumption (kwh)

Transport FuelConsumption (liters)

Water Consumption (cu.m)

ELECTRICITY & WATER CONSUMPTION

5,800,000

kWh cu.m

45,000

2002-08 2009 2010 2011 2012

40,000

35,000

30,000

25,000

20,000

15,000

10,000

5,000

5,600,000

5,400,000

5,200,000

5,000,000

4,800,000

4,600,000

Light Retrofitting, Waterless Urinal & Sensor Lavatory Faucets Implemented

Electricity consumption - HO

Electricity consumption - HO with 2 storey annex

Water consumption - HO

Water consumption - HO with 2 storey annex

Average

Average

Year

Year

Year

DBP SUSTAI NABLE DEVELOPMENT R EPORT 201238 DBP SUSTAI NABLE DEVELOPMENT R EPORT 201238

Our internalgreenbankinghasadirectenvironmentalimpact through the consumption of resources withinthe daily processes and practices of the corporation.However,ourmoresignificantimpactliesonourexternaland indirect effect on the environment, specificallythroughourinvestmentandlendingactivities.

Encouraging clients to include environmentalconsiderations in their businesses and thrusts, weremain true to our strategic role. We help preserveecologicalbalancebyprovidingfundsaswellastechnicalassistance to projects that are environmentally sound,such as new and renewable energy projects, wastemanagement, pollution treatment and abatement,clean production technologies, and natural resourceconservation.Weemployacreditprocessthatincludesenvironmentalduediligenceonspecifictypesofprojectsto identify, assess, and mitigate the environmentalrisks associated with financing small businesses andcommercialandcorporateclients.Takingenvironmentalprotectionthatgoesbeyondourownbackyard,wealsoprotecttheinterestsofthebankbecauseenvironmentalissuesmaygiverisetocredit,legalorreputationalrisks.

Because we see ourselves as a bank committed to“banking for the environment,” we fund projects thatpromote resource conservation and utilize cleanertechnology. Thus, we do our share of curbing soil,

water,andairpollutionbypromotingtheefficientuseof the earth’s precious resources, and improved wastemanagement.

Trulyatriplebottom-linebank,weremaincommittedtosustainingour role in thebankingandfinancialsectorasthepioneeringbankinenvironmentalmanagement.Our aggressive pursuit of eco-friendly opportunitiesemphasizesourcommitmenttoturningtheseinitiativesintoimperativesandsustainingtheessentialprograms,policies, procedures, and guidelines. These help fulfillDBP’s pledge to the planet to bring benefits to clients,stakeholders, and communities through sustainableinteractions with nature and promote better, morejudicioususeofresourcesinthecominggenerations.


DBP’s most important resource is itsemployees. Because of our socialdevelopment agenda, we aggressivelyrecruitedskilled,talented,andconscientiousindividualsfromleadinguniversitiesaswell

asthecorporatearena.

As an equal opportunity employer, we offer a workculture and illness-free environment where employeesaregivenequalopportunityforcareergrowthandeachemployeehasaccesstoarespectfulanddiscrimination-free environment that values contrasting perspectivesandstandpoints.WeembracediversityandcomplywiththeregulationofthePhilippineCivilServiceCommissionto open government employment to all Filipinocitizens, prohibiting discrimination in the selectionand conferment of personnel actions on employees intermsofgender/sexualpreference,civilstatus,physicaldisability, religion, ethnicity, or political affiliation. Wefoster a work culture where employees, regardless ofageandgender,aregivenequalopportunityforcareergrowth,strivingalwaystosafeguardtheworkplaceandouremployeesagainstprejudice.Assuch,theBankneverhad experience of any discrimination-related cases.Whilewehavenoexistingpolicyonthepreferencefor

localresidents,itisacommonpracticetohireemployeeswhoresidewithinrelativeproximityof thegeographiclocation of their assignment to contribute to localemployment.Asagovernmentinstitution,wehireonlyFilipinos.

DBP’s recruitment strategy is anchored on our MeritSelectionPlan,withitsrigoroushiringprocesstoemployaptlycredentialedindividuals.WhilewefacedapotentialcontinuitygapinleadersintopmanagementasaresultofthelastwaveofEarlyRetirementavaileesin2012,theavailability of employees in middle management withdesirable competencies and institutional knowledgefacilitated a smooth transition for the Bank as theyjoinedthetopmanagementlevel.Tous,thisshowsourresilienceduetoourhighstandardsforrecruitmentandour continual professional development for employeesacrosslevelsandgender.

Our compensation structure is competitive with thefinancial and the government sectors and we regularlyreview it to ensure relevance with government policies,industrypractice,overallmarketconditionandtheBank’sperformance in general. Regularly reviewed to ensurerelevance with government policies, industry practice,

People:Our Core Values for Our Core Resource

overallmarketconditionandtheBank’sperformanceingeneral,thecompensationstructureiscompetitiveasperindustry and government sector standards. There is nosignificantdifferenceintheratioofbasicsalaryreceivedbymaleandfemaleemployeesoftheBank.

OuremployeesalsohaveaccesstotheDBPProvidentFund (PF), which provides regular loan facilities andretirement benefits programs considered as fittingrewards for dedicated service. As a steady partner ofour employees during unexpected financial needs,we have a number of alternative supplementarybenefits, includinganenhancedPFCarLoanpackage,a reformulated General Purpose Loan, an extendedcoverage of insurance for housing facility, and aneconomicreliefassistance,tonameafew.

Employees enjoy monetary incentives derived fromperformance-based merit, cultivating a mindsetthat one’s contribution has an impact on our overallsuccess and shall be rewarded accordingly. ThePerformance Management System (PMS), uponwhichthemonetaryincentivesarebased,providesanobjective individual performance assessment for allregularandcasualemployees.

ThePerformanceManagementSystem(PMS)providesan objective individual performance assessmentfor all regular and casual employees. It also fostersemployee development as both employee and

the DBp Workforce

officers rank & file CasualDirectly hired Contractuals

total

no. %

By station:

Head Office 337 556 30 17 940 40%

Branches 288 972 35 86 1,381 60%

total 625 1,528 65 103 2,321 100%

By Gender:

Male 220 573 55 35 883 38%

Female 405 955 10 68 1,438 62%

total 625 1,528 65 103 2,321 100%

By age:

20-29 92 259 0 95 446 19%

30-39 93 455 2 8 558 24%

40-49 220 547 23 0 790 34%

50-59 192 253 38 0 483 21%

60 & above 28 14 2 0 44 2%

total 625 1,528 65 103 2,321 100%

supervisor identify gaps and commit to implementappropriate HR intervention to address such gaps.We provide training opportunities and on-the-jobrotation to employees as to improve productivityand install safeguards for fraud, risks and lossesparticularly for newly opened branches. We embarkon organizational development initiatives thatenhance and realign the functions of several Bankunits to boost operational efficiency and support ahigh-performingorganization.

NolessthanthePhilippineConstitutionguaranteestherightofgovernmentemployeestoself-organize,andwerespectandupholdthisright.TheDBPEmployeesUnion(DBPEU) outlines respective roles and responsibilities inproviding efficient public service while protecting andpromoting employee rights and welfare, and a Union-Management Consultative Committee composed ofsenior officer representatives and DBPEU officers. Atpresent,theunionrepresents99%ofallemployees,hasdesignatedChapterPresidentsinallourregionalofficesandbranchesandisrepresentedinseveraloftheBank’scommittees, including the Personnel Selection Board,Provident Fund Board, and other employee-relatedcommittees. It has a three-year Collective NegotiationAgreement(CNA)withManagement.

The table below shows our workforce profile, coveringthetotalnumberofemployeesengagedtomeetspecificbusinessrequirementsinacost-effectivemanner.


inflow and outflow of talents

new hires separated

Gender total total

By age: Male Female No. % Male Female No. %

20-29 36 80 116 81 10 21 31 20

30-39 12 8 20 14 15 14 29 19

40-49 0 1 1 1 4 9 13 8

50-59 1 4 5 3 21 15 36 24

60 & above 2 0 2 1 24 21 45 29

Total 51 93 144 100 74 80 154 100

By station::

Head Office 14 12 26 18 44 34 78 51

Branch 37 81 118 82 30 46 76 49

Total 51 93 144 100 74 80 154 100

Our top management, composed of the Boardof Directors and senior officers, is responsible forproviding direction toward accomplishing the Bank’sdevelopmental mandate. Members of the Boardof Directors are veteran executives with extensivecareers in various fields.Their individual and collectiveexperience in both the private and public sectors give

them an edge in managing the Bank’s operations.Complementing the Board in terms of their individualcompetencies,experience,andinstitutionalknowledge,ourseniorofficersserveasstrategicpartnersinleadingDBP toward achieving its mandate. While no womensit in our Board, 58% of all senior officers are women.Seventy-sixpercent%oftheseofficersalsobelongtothe50-and-aboveagebracket.

Composition of Governance Bodies

Board of Directors senior officers

male female total % male female total %

By Age:

30 - 39 0 0 0 0 0 1 0 3%

40 – 49 1 0 1 12% 1 5 6 20%

50 – 59 5 0 5 63% 5 11 16 54%

60 & above 2 0 2 25% 3 4 7 23%

total 8 0 8 100% 9 21 30 100%

We have a professional development mandate toensurethecontinualbettermentofouremployeesandcontinuously cultivate a dynamic workforce throughthe Bank’s progressive recruitment, development,and retention programs. We conducted training anddevelopment initiatives under our 2012 learningand development agenda, which focused on thepromotionofcompliance,governance,andmanagerialcompetencies. Employee-assessment surveys andresults generated by PMS identifed gaps and areasfor improvement and provided valuable insight intoopportunities for employee development. Priority was

also given to training initiatives towards making us acustomer-centricorganizationalongwithstrengtheningouroperationalexcellence.

Managerial training peaked in 2012 as an effect ofthe upgrade in qualification standards for managerialand executive posts in government, as required underthe Civil Service Commission’s Memorandum Circular


No.13.Approximately15%ofthosetrainedin2012wereretiring employees looking forward to a sustainableand productive life after a career ending in the Bank.The preparation we provided them, which included a

holistictrainingontheconceptofnurturingabundanceand happiness, wealth management, savings andinvestments, aided in transitioning our retiringemployeesintothenewfrontierofanon-workinglife.

employee training and Development

participants percentage of attendants hours of training

Male 38% 83

Female 62% 52

Total 75% of workforce 32

Category employee Count training hours average training hours per Category

Senior Officers 43 1,310 30

Junior Officers 605 28,231 47

Supervisory 241 4,271 18

Staff 887 22,750 26

total 1,776 56,562 32

To maintain optimal performance of the workforcedespitethe2012EarlyRetirementprogram,ourHumanResourceManagementsustainedtheuseofthetalentassessment process. Using targeted selection, theprocess facilitated the steady inflow of talents andhigh potentials to supervisory and managerial posts.With all officers and staff participating in a year-endperformance appraisal and individual developmentplanning,theassessmentprocessservedastriggersforraterstocoach,train,orprovideon-the-jobexposure.

Another aspect of care for the employees lies in themaintenanceofahealthy,functioningworkforce.Tothisend, DBP has implemented several disease prevention

and health promotion programs and activities, a goodnumberofwhichwereextendedtotheemployees’familyand dependents. Constant reminders through lectures(suchasthequarterlylectureonlifestylediseases)andchairsideinstructionsonmedicalanddentalcarewereprovided. Customary key preventive services like theannualmedicalcheck-up,anti-diabetesandtuberculosisprogram,vaccinationagainstfluandvisiontestingwereundertakentoensurethatemployees’healthisontrack.

Even as the Bank strives for an illness-free workenvironment, a number of cases of occupationaldiseases were recorded in 2012. Incidence of injury,albeitnegligible,wasalso reported in theHeadOffice.Noincidenceoffatalitywasrecorded.

occupational Diseases and Work-related injury

male female total

occupational Diseases 11 11 22

Work-related musculosketal 2 2 4

injury cases 1 0 1

For 2012, records show that there is an aggregate of8,715 unscheduled absences (sick leave) from 2,121employeesintheHeadOfficeandBrancheswitharate

of 1.7% out of the 241 total working days. By gender,therateishigheramongthefemaleemployeesat62%comparedtothemaleemployees’38%.


Perhaps the most valuable component of alldevelopmentthrusts iscareandconcernforthehuman condition. Beyond the goal of economicgrowth lies the upliftment of Filipinos—the improvement in the quality of life, the

enlargementoftherangeofpeople’schoices,andaccesstogoodandservicesthatarewithinhumanrights.

Asacatalystforaprogressiveandpoverty-freePhilippines,wesupportthedevelopmentofefficientsocialservices.Ourprogramdesign,formulation,andimplementationstrictlyconsideridentifiedprioritysectorsforsustainablegrowth:infrastructure and logistics, the environment, socialservices and community development, and micro, smallandmediumenterprises.Byinvestinginpeople,weenableeveryonetopursuechosenlifepaths,developcapabilities,achieveadecentstandardofliving,andcontributeactivelytothecontinualdevelopmentofoursociety.

People:Sharing the Fruits of our Success with the Underprivileged


Wearecommittedtocontributingtothedevelopmentof sustainable livelihood through the education of ourunderprivilegedbutbrilliantstudentstowardabrighterfuture.Wehavealreadybeguntowitnesswhatwehavealways envisioned: the transformative effects of ourscholarshipprogram,theDBPEndowmentforEducationProgram (DEEP), and its far reaching implications onpovertyreductionandeconomicprosperityformanyofourtargetbeneficiariesandprogramstakeholders.

Launchedin2008onaP1-billionbudgetallocationfromDBP’sincome,DEEPprovidesfreeeducationtodeservingstudents, including persons with disabilities, fromregionswiththehighestlevelofpovertyincidence.Theprogramenablesthemtopursuedegreeornon-degreecourses in maritime education, agriculture, technicalor vocational courses, entrepreneurship, forestry,education, and hotel and restaurant management.DEEPsupportsscholarsinbothtuitionandcostofliving

social services scorecard

Community Development in 2012

amount status purpose

P488.9 million Loan Releases shelter and real estate, small public and private infrastructure, and tourism projects

P3.38 billion Loan Approvals community development projects

P5.028 Billion Pipeline Projects shelter and real estate projects, small public and private infrastructure projects, and tourism projects

health Care in 2012


P641.83 million Loan Releases 15 hospital projects

P1.64 billion Loan Approvals 15 health care projects

P1.503 billion Pipeline Projects 23 health care projects

education


P188 million Loan Releases development of 122 classrooms and 36 school facilities such as libraries, laboratories, and function rooms

P283 million Loan Approvals 14 education projects

P338.64 million Pipeline projects 9 projects are from state colleges and universities, and local governments, and 11 are from the

private sector

allowance.TheprogramalsoenablesschoolstoupgradetheirfacilitiesandensurequalityeducationforboththeDEEPscholarsandthewholestudentpopulationaswell.

Ourprogramalsoseekstoensurecareforourbeneficiariesand mechanisms for their eventual integration intoproductive society. We inculcate in them the valuestoward becoming not only future workers in the globalcommunity of nations, but also our country’s very ownambassadors of goodwill. DEEP scholars are taught totreasuretheircareersandkeepnationalprideatheart.

DEEP also has a system of education-to-employmentto ensure job assignment for the scholar upongraduation.Thus,weareabletoachievecontinuityandsustainabilitythroughjobgenerationandvolunteerismforourgraduatesinorderthattheymayalsovoluntarilylend their support to future DEEP scholars. At present,31schoolsthroughoutthecountryareactivelyengaged


inDEEP,andpartnershipswithprincipalsandemployershave been forged towards definite employment of ourgraduatesinmanningandshippingcompanies,schools,businessprocessoutsourcingfirmsandotherbusinessorganizations.

In March 2012, 113 DEEP nursing scholars graduated,with one magna cum laude and 20 cum laudes, aswell as a 100% passing rate in the July 2012 NursingLicensureExaminations. Atotalof1,428scholarshavecompletedvariouscourses.Bytheendof2012,DEEPhadalreadybeensupportingatotalof1,970scholarsalloverthecountry.

Our DBP Higher Education Loan Program for Students(DBP HELPS), a wholesale loan facility using qualifiededucational institutionsasconduitsforstudent loans,supports the National Government’s commitment toeducation and poverty reduction in the MillenniumDevelopment Goals, and the 2011-2016 Philippine

Development Plan’s “Education for All” by 2015. Assuch, DBP HELPS is being eyed as model frameworkfor all publicly funded student assistance programsconvened under the National Economic DevelopmentAuthority’s Board Committee on Social Development.DBP HELPS is also in compliance with the proposedcongressional legislation for financial institutions tocontributetohumandevelopment.Followingaclamorfrom the DEEP Partner Schools for a study-now-pay-later scheme, we make available a P2 billion lendingfacilitybeginning2013.

In addition, DBP grants overseas workers multipleremittance options and access to financial literacycampaignsandentrepreneurialadvocacyworkinvariousfora, including pre-departure orientation seminars,symposia, and other marketing events through DBP’sCenterforGlobalFilipinos,aspartofhumancapabilitydevelopmentbeyondeconomicmeasures.


In keeping with our corporate philosophy ofpromoting and maintaining the highest standardsof service and corporate governance, we make surethatourproductsandservicesmeasureuptoclientexpectations,industrystandards,andbestpractices.

Key to our product responsibility management is astrategicfocusonclientsatisfactionthroughthepropertreatment of clients, timely action on their needs,speedy processing, and disclosure on products andservices. We make it a point to fully understand ourclientsandtheircontextsbyactivelyengagingthemindiscussionsandcontinuouslyevaluatingandimproving

productofferingstoprovidethemwiththeappropriateandresponsiveproductsandservices.Weturnbusinessoutreach activities and our participation in industryconferences into opportunities to interact with them,learn from them, and integrate their insights into ourproductinnovation.

In2012,weconductedabusinessoutreachtoencourageparticipants to propose more development projectsin Eastern Visayas, particularly in the priority areasof infrastructure and logistics, environment, socialservices,andmicro,smallandmediumenterprises.Wealso extended the reach of our enabling development

People:Client Satisfaction at the Core of our Products and Services


programs with a briefing of overseas Filipino workersin the Kingdom of Saudi Arabia to discuss the waysand possibilities of establishing or expanding theirbusinesses.

We also make it easy for the clients to send usfeedback. We have a client feedback mechanism thatutilizes several communication channels to solicitand initiate appropriate action on client suggestions,comments and complaints. Feedback on products andservices is commonly received and generated throughe-mail, telephone, and service inquiries through ourwebsite. However, the DBP Client Feedback SurveyProject provides us with a means for obtaining amore measurable indication of client satisfaction. Ourfeedbackformsolicitsclientinsightsontheservicesofourstaff,processingtime,premisesandfacilities,andifapplicable, the structure of our credit facilities. Client-accomplished feedback forms that rate the marketingunitsandbranchesnationwideareprocessedquarterly,and the results are reported directly to the Bank’sManagement Committee. In 2012, we were able torespond to a total of 1,026 accomplished client surveyforms.Insummary:

• ThemarketingunitsandbranchesachievedanaverageoverallclientratingofVeryGoodandExcellent – well within the Bank’s customersatisfaction target of at least a 60% rating ofGood, Very Good, and Excellent of the totalnumber of Client Survey Feedback responsesreceived;

• Recurring and common comments,suggestions, and feedback received pointedout additional customer requirements formore front-liners and tellers, the adoption ofimproved systems to facilitate transactionprocessing,andtheinstallationofmoreATMs.

The client feedback survey results were given to themarketing units and branches for their information,immediateissueresolution,andappropriateaction.

We also maintained proper customer informationconfidentialitythroughoutallour interactionsbecauseclientconfidentialityisofutmostimportancetous.We

respectandprotecttheprivacyofallourBankcustomers,keeping their information secure. We have guidelines,measures and restrictions in place to ensure andmaintain proper customer information confidentiality.No substantiated complaints concerning breach ofprivacywasfiledagainstusin2012.

We also tap varied opportunities to deliver ourproductsandservicestoabroadbaseofmarketsandclientssuchasbranchexpansionforawiderreachandATMavailabilityforsafetyandconvenience.Wehaveacontinuousbranchexpansionprogramthatallowsustocreatevariedopportunitiesforproductandservicedelivery to a broad base of markets and clients. In2012, we opened five new branches in the followinglocations: Sta. Cruz, Laguna; Virac, Catanduanes;Batangas City; Carcar, Cebu; and Santiago, Isabela.We also re-opened and re-located DBP Taguig. Ourwebsiteprovideseasyaccesstoinformationaboutourproductsandservices.

Marketing plays a crucial role in building the Bank’sportfolio because this promotes banking services thatare driven by demand. We deliver information to ourclients through all forms of media to ensure that ournews reaches them. Our promotional and advertisingcampaign in 2012 continued to be aligned with ourcorporate mission and advocacy towards catalyzing aprogressivePhilippines.

Ouradvertisingcampaignsin2012encouragedvigilanceandactionacrosssectorstosafeguardthehealthofthecountry’s natural resources. “Water” was adjudged awinnerintheBestTVAdBrandedcategoryofthe34thCatholic Mass Media Awards, a prestigious body thatbestows recognition on media products that “enhancethe total human development of the Filipino audiencethrough the competent and professional use of massmediatechniquesandtopromoteChristianvalues.”Wealso supported “Manila 2012,” the annual meeting oftheAsianDevelopmentBank,whichwashostedbythePhilippineslastyear.


Regularmediacoverageofourdevelopmentalinitiativesboostedourcorporate reputationamongstakeholders,funders, partners, and the general public. Thepublication of print advertisements and news releasesonlineandintheprintmediaeffectivelypromotedourprogramsandservicesonaregularbasis.Lastyear,wealsolaunchedour“DepositosaBangko,Panalo!”,amajorrewardsprogramforourloyaldepositorsthatservedtoinstilthevalueofsaving.Alltheseservedtoreinforceourcorporateimageasadynamicdevelopmentinstitutionalwaysreadytoextenditsreachtotargetmarketsandclients.

Weensurethatthecommunicationswereleaseinanyformforourclientsare truthfuland legallycompliant.Amidst consistent promotional efforts, we remaincommittedthatourcorporatecommunicationsstrategycomplies strictly with relevant regulations, laws, andinstitutional policies and safeguards. Our advertisingand promotions, marketing communications andsponsorship programs and activities are free of anycitations of legal violations and deviations fromprescribedandacceptedstandards.Amongourguidinglawsandregulationsarethefollowing:

1. Ad Standards Council’s (ASC) Standards ofAdvertising that prescribe a set of guidelinespromoting its principles on self regulation ofadvertising content, consumers interest andtruthinadvertising.

2. BancNetIdentityStandards

3. Certification International PhilippinesRegulations on the use of the ISO 14001certification mark for advertising andpromotionalmaterials

4. Bangko Sentral ng Pilipinas Circular No. 61,Series of 1995 - Consolidated Rules andRegulations on Currency Notes and Coins,particularlyonthereproductionand/oruseoffacsimiles of legal tender Philippine currencynotes.

5. PDIC Regulatory Issuance No. 2009-01 - Rulesand Regulations on Advertisement of PDICMembershipandDepositInsuranceCoverage


6. Republic Act. 6713 - An Act Establishing aCode of Conduct and Ethical Standards forPublic Officials and Employees, to Upholdthe Time-Honored Principle of Public OfficeBeing a Public Trust, Granting Incentives andRewards for Exemplary Service, EnumeratingProhibitedActsandTransactionsandProvidingPenalties forViolationsThereof and for OtherPurposes. This law provides for commitmentto public interest among government officesintheutilizationoftheirresourcesandpowers(Section 4), and prompt action on letters andrequests(Section5.a).

7. The Philippine Constitution: Article II -Declaration of Principles and State Policies ofthe Philippine Constitution that states: “TheState shall encourage non-governmental,community-based, or sectoral organizationsthat promote the welfare of the nation.”(Section 23). Section 24 of the provisionalso influences our communication designand strategy as it underscores: “The Staterecognizesthevitalroleofcommunicationandinformationinnation-building.”

Finally, we align our products and services with thenational development agenda. Our mandate ofcomplementing government efforts is evident in ourprogram design, formulation, and implementation.In 2012, we launched the following initiatives: theAgribusiness Development Program and the SmallBananaFarmers’FinancingProgramincompliancewiththeAgri-AgraReformCreditAct;theFinancingProgramfortheSanitationSectorinsupportoftheCleanWaterAct; and the Tree Plantation Financing Program insupportoftheNationalGreeningProgram.

WealsowidenedtheremittancefootprintoftheCenterforGlobalFilipinos,whichgrantsouroverseasworkersaccess to our low-cost, efficient, and reliable fundtransfer services, and a wide range of service deliverymodes that cater to the varied requirements of OFWs.OurOFWservices in15countrieshavegiventhemthe

convenience of making transactions with DBP or anyother bank in the Philippines right from workplacesoverseas.Theymayalsohavethefundspickedupfromover2,000authorizedcashpick-uplocationsnationwide,delivered to more than 1,000 cities and municipalitiesnationwide, or have their premiums or loans paid toother government institutions like the Social SecuritySystemandPhilHealth.


Global Reporting Initiative (GRI) Index

profile DisClosures

Gri indicator Description reference page/s

strategy and analysis

1.1 Statementfromthemostseniordecisionmakeroftheorganization. 2-4

1.2 Descriptionofkeyimpacts,risks,andopportunities. 2-4

organizational profile

2.1 Nameoftheorganization. 6

2.2 Primarybrands,products,and/orservices. 7-8

2.3 Operationalstructureoftheorganization,includingmaindivisions,theoperatingcompanies,subsidiaries,andjointventures.

7-8

2.4 Locationoforganization’sheadquarters 7

2.5 Numberofcountrieswheretheorganizationoperates,andnamesofcountrieswitheithermajoroperationsorthatarespecificallyrelevanttosustainabilityissuescoveredinthereport.

7

2.6 Natureofownershipandlegalform. 6-7

2.7 Marketsserved(includinggeographicbreakdown,sectorsserved,andtypesofcustomers/beneficiaries). 6-8

2.8 Scaleofthereportingorganization. 7-8

2.9. Significantchangesduringthereportingperiodregardingsize,structure,orownership 7

2.10 Awardsreceivedinthereportingperiod. 8-9

report parameters

3.1 Reportingperiod(e.g.,fiscal/calendaryear)forinformationprovided. InsideCover

3.2 Dateofmostrecentpreviousreport(ifany). InsideCover

3.3 Reportingcycle(annual,biennial,etc.) InsideCover

3.4 Contactpointforquestionsregardingthereportoritscontents. 1

3.5 Processfordefiningreportcontent. 1

3.6 Boundaryofthereport(e.g.,countries,divisions,subsidiaries,leasedfacilities,jointventures,suppliers).SeeGRIBoundaryProtocolforfurtherguidance.

1

3.7 Stateanyspecificlimitationsonthescopeorboundaryofthereport(seecompletenessprincipleforexplanationofscope). 1

3.8 Basisforreportingonjointventures,subsidiaries,leasedfacilities,outsourcedoperations,andotherentitiesthatcansignificantlyaffectcomparabilityfromperiodtoperiodand/orbetweenorganizations.

1

3.9 Datameasurementtechniquesandthebasesofcalculations,includingassumptionsandtechniquesunderlyingestimationsappliedtothecompilationoftheIndicatorsandotherinformationinthereport.Explainanydecisionsnottoapply,ortosubstantiallydivergefromtheGRIIndicatorProtocols.

1

3.10 Explanationoftheeffectofanyre-statementsofinformationprovidedinearlierreports,andthereasonsforsuchre-statement(e.g.mergers/acquisitions,changeofbaseyears/periods,natureofbusiness,measurementmethods).

1

3.11 Significantchangesfrompreviousreportingperiodsinthescope,boundary,ormeasurementmethodsappliedinthereport. 1

3.12 TableidentifyingthelocationoftheStandardDisclosuresinthereport. 50-52

3.13 Policyandcurrentpracticewithregardtoseekingexternalassuranceforthereport. 1

Governance, Commitments and engagements

4.1 Governancestructureoftheorganization,includingcommitteesunderthehighestgovernancebodyresponsibleforspecifictasks,suchassettingstrategyororganizationaloversight.

11-12

4.2 IndicatewhethertheChairofthehighestgovernancebodyisalsoanexecutiveofficer. 11

4.3 Fororganizationsthathaveaunitaryboardstructure,statethenumberandgenderofmembersofthehighestgovernancebodythatareindependentand/ornon-executivemembers.

11

4.4 Mechanismsforshareholdersandemployeestoproviderecommendationsordirectiontothehighestgovernancebody. 11-12

4.5 Linkagebetweencompensationformembersofthehighestgovernancebody,seniormanagers,andexecutives(includingdeparturearrangements),andtheorganization’sperformance(includingsocialandenvironmentalperformance).

12

4.6 Processesinplaceforthehighestgovernancebodytoensureconflictsofinterestareavoided. 11

4.7 Processfordeterminingthecomposition,qualifications,andexpertiseofthemembersofthehighestgovernancebodyanditscommittees,includinganyconsiderationofgenderandotherindicatorsofdiversity.

11

4.8 Internallydevelopedstatementsofmissionorvalues,codesofconduct,andprinciplesrelevanttoeconomic,environmental,andsocialperformanceandthestatusoftheirimplementation.

8,10

4.9 Proceduresofthehighestgovernancebodyforoverseeingtheorganization’sidentificationandmanagementofeconomic,environmental,andsocialperformance,includingrelevantrisksandopportunities,andadherenceorcompliancewithinternationallyagreedstandards,codesofconduct,andprinciples.

11-12


profile DisClosures


Governance, Commitments and engagements

4.10 Processesforevaluatingthehighestgovernancebody’sownperformance,particularlywithrespecttoeconomic,environmental,andsocialperformance.

11

4.11 Explanationofwhetherandhowtheprecautionaryapproachorprincipleisaddressedbytheorganization. 12-13

4.12 Externallydevelopedeconomic,environmental,andsocialcharters,principles,orotherinitiativestowhichtheorganizationsubscribesorendorses.

13-15

4.13 Membershipsinassociations(suchasindustryassociations)and/ornational/internationaladvocacyorganizationsinwhichtheorganization:*Haspositionsingovernancebodies;*Participatesinprojectsorcommittees;*Providessubstantivefundingbeyondroutinemembershipdues;or*Viewsmembershipasstrategic.

17

4.14 Listofstakeholdergroupsengagedbytheorganization. 17

4.15 Basisforidentificationandselectionofstakeholderswithwhomtoengage. 16,18

4.16 Approachestostakeholderengagement,includingfrequencyofengagementbytypeandbystakeholdergroup. 19

4.17 Keytopicsandconcernsthathavebeenraisedthroughstakeholderengagement,andhowtheorganizationhasrespondedtothosekeytopicsandconcerns,includingthroughitsreporting.

19

Gri performanCe inDiCators


product and services impact

management approch Disclosure

FS1 Policieswithspecificenvironmentalandsocialcomponentsappliedtobusinesslines. 29-30

FS2 Proceduresforassessingandscreeningenvironmentalandsocialrisksinbusinesslines. 29-30

FS3 Processesformonitoringclients’implementationofandcompliancewithenvironmentalandsocialrequirementsincludedinagreementsortransactions.

29-30

FS4 Process(es)forimprovingstaffcompetencytoimplementtheenvironmentalandsocialpoliciesandproceduresasappliedtobusinesslines.

29-30

FS5 Interactionswithclients/investees/businesspartnersregardingenvironmentalandsocialrisksandopportunities. 29-32

FS6 Percentageoftheportfolioforbusinesslinesbyspecificregion,size(e.g.micro/SME/large)andbysector. 23-24

FS7 Monetaryvalueofproductsandservicesdesignedtodeliveraspecificsocialbenefitforeachbusinesslinebrokendownbypurpose.

44,22-28

FS8 Monetaryvalueofproductsandservicesdesignedtodeliveraspecificenvironmentalbenefitforeachbusinesslinebrokendownbypurpose.

15,26-28,31-32

FS9 Coverageandfrequencyofauditstoassessimplementationofenvironmentalandsocialpoliciesandriskassessmentprocedures

30

economic

management approach Disclosure

EC1 Directeconomicvaluegeneratedanddistributed,includingrevenues,operatingcosts,employeecompensation,donationsandothercommunityinvestments,retainedearnings,andpaymentstocapitalprovidersandgovernments.

20-21

EC7 Proceduresforlocalhiringandproportionofseniormanagementhiredfromthelocalcommunityatsignificantlocationsofoperation.

39

EC8 Developmentandimpactofinfrastructureinvestmentsandservicesprovidedprimarilyforpublicbenefitthroughcommercial,in-kind,orprobonoengagement.

20-28,13-15,30-32,43-45

environmental


EN3 Directenergyconsumptionbyprimaryenergysource. 35

EN4 Indirectenergyconsumptionbyprimarysource. 35

EN5 Energysavedduetoconservationandefficiencyimprovements. 35

EN6 Initiativestoprovideenergy-efficientorrenewableenergybasedproductsandservices,andreductionsinenergyrequirementsasaresultoftheseinitiatives.

35

EN7 Initiativestoreduceindirectenergyconsumptionandreductionsachieved. 35


Gri performanCe inDiCators


environmental

EN8 Totalwaterwithdrawalbysource. 35

EN11 Locationandsizeoflandowned,leased,managedin,oradjacentto,protectedareasandareasofhighbiodiversityvalueoutsideprotectedareas.

32

EN12 Descriptionofsignificantimpactsofactivities,products,andservicesonbiodiversityinprotectedareasandareasofhighbiodiversityvalueoutsideprotectedareas.

31-32

EN13 Habitatsprotectedorrestored. 31-32

EN14 Strategies,currentactions,andfutureplansformanagingimpactsonbiodiversity. 31-32

EN16 Totaldirectandindirectgreenhousegasemissionsbyweight. 35

EN17 Otherrelevantindirectgreenhousegasemissionsbyweight. 35

EN18 Initiativestoreducegreenhousegasemissionsandreductionsachieved. 35-37

EN26 Initiativestomitigateenvironmentalimpactsofproductsandservices,andextentofimpactmitigation. 38,29-32

EN28 Monetaryvalueofsignificantfinesandtotalnumberofnon-monetarysanctionsfornon-compliancewithenvironmentallawsandregulations.

34

social


labor practices and Decent Work

LA1 Totalworkforcebyemploymenttype,employmentcontract,andregion,brokendownbygender. 40

LA2 Totalnumberandrateofnewemployeehiresandemployeeturnoverbyagegroup,gender,andregion. 41

LA3 Benefitsprovidedtofull-timeemployeesthatarenotprovidedtotemporaryorpart-timeemployees,bymajoroperations.

40

LA4 Percentageofemployeescoveredbycollectivebargainingagreements. 40

LA7 Ratesofinjury,occupationaldiseases,lostdays,andabsenteeism,andnumberofwork-relatedfatalitiesbyregionandbygender.

42

LA8 Education,training,counseling,prevention,andrisk-controlprogramsinplacetoassistworkforcemembers,theirfamilies,orcommunitymembersregardingseriousdiseases.

42

LA10 Averagehoursoftrainingperyearperemployeebygender,andbyemployeecategory. 41-42

LA11 Programsforskillsmanagementandlifelonglearningthatsupportthecontinuedemployabilityofemployeesandassisttheminmanagingcareerendings.

41-42

LA12 Percentageofemployeesreceivingregularperformanceandcareerdevelopmentreviews,bygender. 40

LA13 Compositionofgovernancebodiesandbreakdownofemployeesperemployeecategoryaccordingtogender,agegroup,minoritygroupmembership,andotherindicatorsofdiversity.

41

LA14 Ratioofbasicsalaryandremunerationofwomentomenbyemployeecategory,bysignificantlocationsofoperation. 40

human rights

HR4 Totalnumberofincidentsofdiscriminationandcorrectiveactionstaken. 39

HR5 Operationsandsignificantsuppliersidentifiedinwhichtherighttoexercisefreedomofassociationandcollectivebargainingmaybeviolatedoratsignificantrisk,andactionstakentosupporttheserights.

40

society Description

FS14 Initiativestoimproveaccesstofinancialservicesfordisadvantagedpeople. 43-45

SO3 Percentageofemployeestrainedinorganization’santi-corruptionpoliciesandprocedures. 15

SO5 Publicpolicypositionsandparticipationinpublicpolicydevelopmentandlobbying. 13-15

product responsibility

PR3 Typeofproductandserviceinformationrequiredbyprocedures,andpercentageofsignificantproductsandservicessubjecttosuchinformationrequirements.

46-47

PR5 Practicesrelatedtocustomersatisfaction,includingresultsofsurveysmeasuringcustomersatisfaction. 46-49

FS16 Initiativestoenhancefinancialliteracybytypeofbeneficiary. 22-23

PR6 Programsforadherencetolaws,standards,andvoluntarycodesrelatedtomarketingcommunications,includingadvertising,promotion,andsponsorship.

48-49

PR7 Totalnumberofincidentsofnon-compliancewithregulationsandvoluntarycodesconcerningmarketingcommunications,includingadvertising,promotion,andsponsorshipbytypeofoutcomes.

48

PR8 Totalnumberofsubstantiatedcomplaintsregardingbreachesofcustomerprivacyandlossesofcustomerdata. 47


Chairman: Benel D. Lagua

Co-Chairman:Isidro A. Sobrecarey

Members:Paul D. LazaroAurora C. MaghirangRomeo B. CarandangRizalino A. OlandescaAngelica G. Arile (not in photo)

Edgardo T. ManaloMario A. TorrefrancaRacquel S. Saenz de Tejada

Secretariat: Joanne M. Ruiz

2012 DBP SDR Committee

WeincludeGRIApplicationleveltableinourreporttosupportourself-declarationatApplicationLevelB.


Development Bank of the philippines

Head Office: Sen. Gil J. Puyat Avenue corner Makati Avenue, Makati City, Philippines

Mailing Address: P.O. Box 1996, Makati Central Post Office 1200, Makati City, Philippines

Email Address: [email protected]: www.dbp.ph

Trunkline: (632) 818-9511 to 20 • 818-9611 to 20Fax (632) 893-4311

the colors of development - development bank of the

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