Filtered By: Money

GCG to evaluate proposed Landbank-DBP merger

The Governance Commission for GOCCs said on Thursday it would evaluate the proposed merger of the state-run Land Bank of the Philippines and the Development Bank of the Philippines and come up with a recommendation to be submitted to the Office of the President.

In a statement, the GCG said legal concerns were raised by the DBP about the proposed merger with Landbank, with the latter as the surviving entity poised to become the largest bank in the country, during a sectoral meeting attended by the stakeholders.
The DBP has earlier said that the plan to merge it with Landbank would require legislation as both banks were created by different enabling laws or charters.
GCG Chairperson Alex Quiroz said the commission “will have to look into the specifics of the merger as it involves two major banks that are state-owned.”

“We want to ensure that the merger is seamless and will not disrupt or cause issues or concerns in their respective operations and processes… It is within the jurisdiction of GCG to ensure that the merger of Landbank and DBP is beneficial to the state,” Quiroz said.
The GCG said the evaluation would cover all areas and be “considered of utmost importance as Landbank and DBP have been named as sources of the start-up funds for the government’s proposed sovereign wealth fund, or the Maharlika Investment Fund (MIF)."

“We are grateful that in this process of merger, the President recognizes the oversight function of the Governance Commission,” GCG Commissioner Gideon Mortel said.
On Tuesday, Finance Secretary Benjamin Diokno announced that President Ferdinand Marcos Jr. had given the thumbs up for the merger of the two state-owned banks, which he said would result in P5.2 billion per year worth of savings for the government.
Landbank is the Philippines’ second-largest universal bank with P2.76 trillion in assets, next to BDO Unibank with P3.73 trillion in assets.
The DBP ranked eighth with P1.035 trillion worth of assets.
The GCG said that the merger, should it proceed, must not result in the abandonment of any of the mandates of the two banks.
Landbank serves the agriculture sector, while the DBP takes care of the needs of industrial enterprises.

The planned merger of Landbank and DBP was first pushed by then-President Benigno Aquino III in 2016 but was abandoned by the Duterte administration due to concerns that this would not serve the public interest because the banks were created for different purposes. —VBL, GMA Integrated News