Finance Secretary Benjamin Diokno on Friday defended the proposed merger of the Land Bank of the Philippines and the Development Bank of the Philippines (DBP), saying that it will eliminate the redundancy and inefficiency in operations.
Diokno reiterated that the Department of Finance (DOF) supported the move to consolidate the two banks to create a single government bank.
“The merger will eliminate redundancy and inefficiency in operations. Projected operating cost savings due to the merger could reach at least P5.3 billion per year, or more than P20 billion over the next four years,” he said.
He said the merger aims to achieve synergies that will enhance the efficiency of operations and generate cost savings for the government.
Diokno also said that he will be willing to participate in the possible Senate inquiry on the proposed merger.
This was after Senate Deputy Minority Leader Risa Hontiveros raised concerns about the potential risks and benefits that the move may bring to the economy, the stability of the financial system, and various stakeholders, including the employees of both banks.
“On the retrenchments resulting from the merger, we are determined to work closely with the two banks to ensure that personnel decisions are consistent with our objective to enhance the bank’s efficiency and effectiveness," he said.
The Finance chief said those who will be separated receive a "fair package of benefits in recognition of their valuable service to the government."
“We do not need a new law to proceed with the merger. The Supreme Court has upheld the constitutionality of the Governance Commission for Government-Owned and Controlled Corporations (GCG) Law, which provides for the powers of the GCG to merge GOCCs with charters,” Diokno said.
“Following the approval of the GCG, we now await the issuance of an Executive Order sometime this month. There will be a joint crafting and approval of the Operational Integration Plan in September, followed by the approval of the Monetary Board in October, before the final legal merger between LANDBANK and DBP by November,” he added.
The GCG also earlier expressed openness to any inquiry on the proposed merger of LandBank with the DBP.
Diokno had said that the proposed merger of LandBank with the DBP was approved by the President during their sectoral meeting.—LDF, GMA Integrated News