The Philippine Senate building (PNA file photo by Avito Dalan)
MANILA – A senator wants to look into the proposed merger between the Landbank of the Philippines (LBP) and the Development Bank of the Philippines (DBP) likely to be finalized by the middle of 2024.
Senator Sherwin Gatchalian said Friday the proposed merger should respond to the needs of various sectors, as well as the banking industry.
“There is a need for the Senate to weigh in on whether the merger of these two government banks will better serve the country’s development needs in the agriculture, infrastructure, and industrial sectors, particularly among the micro, small and medium enterprises, and to ensure that the proposed merger will not dilute the government’s focus on developing these target sectors,” he said in a statement.
“The Senate also needs to look into concerns on the potential risks the contemplated merger may bring to the stability of the banking industry and the economy, as the consolidation of these banks to form the largest bank in the country could concentrate risks and increase vulnerability to financial market stress and economic shocks,” he added.
Gatchalian recently filed Senate Resolution No. 697 which seeks to determine the propriety, viability, compliance, and potential effects of the merger in aid of legislation.
The government, he said, should ensure that the operations of government-owned or controlled corporations (GOCCs) are rationalized and monitored centrally so that government assets and resources are used efficiently.
Finance Secretary Benjamin Diokno earlier proposed the LBP-DBP merger to create a "bigger, stronger, and more resilient bank" to better serve the country’s development needs.
The proposed merger is expected to create the largest banking institution in the Philippines with an estimated asset size of about PHP4.18 trillion once implemented.
This is expected to eliminate redundancies and inefficiency in operations, resulting in savings projected at PHP5.3 billion yearly.
In a report submitted to the Office of the President, the Governance Commission for GOCCs (GCG) affirmed that the proposed merger does not require new legislation and that existing laws had given the President the authority to implement such a merger.
GCG Chairperson Alex Quiroz cited in a previous statement Memorandum Circular 2015-03 emphasizing that the commission has the power to ascertain the manner of the merger —either de jure (officially/legally sanctioned) or de facto (practically sanctioned). (PNA)
