Treasury Bureau: Landbank stable amid qualms over Maharlika Fund contribution

National Treasurer Rosalia de Leon on Saturday allayed fears that state-owned Land Bank of the Philippines, poised to become the country’s largest bank, would collapse should the proposed Maharlika Investment Fund (MIF) fail.

Under the proposed MIF bill, Landbank was among the sources for the sovereign wealth fund’s seed capital of P125 billion, contributing P50 billion.

The Development Bank of the Philippines (DBP), another state-run lender, as well as the national government, are eyed to contribute P25 billion and P50 billion, respectively, to the MIF.

Senator Aquilino Pimentel III earlier raised concerns that if the sovereign wealth fund failed, it could lead to the possible collapse of the institutions tapped to bankroll the MIF.

During the Saturday News Forum in Quezon City, de Leon pointed out that “Landbank is a very stable bank in terms of [assets].”

Landbank is the Philippines’ second largest universal bank with P2.76 trillion in assets, next to Sy-led BDO Unibank with P3.73 trillion in assets.

“First of all, it’s a government-owned bank,” the Treasurer said.

De Leon also noted that Landbank’s investment to the MIF was only P50 billion or less than 3% of its P1.3-trillion investible funds.

“So that means its investment is very small… It will not affect the prudential ratios being imposed by the Bangko Sentral,” she said.

Department of Budget and Management Undersecretary Jojit Basilio said the public should be encouraged to deposit their money in Landbank due to higher potential returns from the MIF.

De Leon said the MIF would be invested in capital markets and sectoral investments, such as infrastructure projects.

Meanwhile, Finance Secretary Benjamin Diokno said President Ferdinand "Bongbong" Marcos Jr. had approved the proposed merger of LandBank with the DBP during a sectoral meeting. — DVM, GMA Integrated News