State-owned bank hits GOCC body’s statement saying merger does not need new law
MANILA - The Development Bank of the Philippines on Wednesday insisted that its proposed merger with Land Bank of the Philippines needs to be legislated.
DBP rejected the statement by the GCG or Governance Commission on Government Owned and Controlled Corporations (GOCCs) that the merger of the two state-owned banks does not require legislative intervention.
“DBP stands firm on its position that unification of the two financial institutions requires Congressional action,” the bank said in a statement.
Several media outlets earlier reported that the GCG had informed President Ferdinand Marcos Jr of its legal opinion on the planned merger.
But DBP said it has already filed an appeal with the Office of the President questioning GCG’s legal study, which the bank said was “legally erroneous.”
DBP also questioned the Department of Finance’s reasons for backing the merger, which includes the “elimination of perceived redundancy and inefficiencies in the two banks.”
LANDBANK’s mandate is different from DBP’s, the company said.
“DBP is to develop industry; LANDBANK, agriculture,” DBP added.
“We will explore all options and available remedies to strongly articulate our position that the merger is unwarranted and ill-timed given the existing socio-economic milieu that necessitates a responsive and progressive development financing institution such as DBP,” the state-owned lender said.
Finance Secretary Benjamin Diokno earlier said merging the 2 financial institutions will create a bank that's bigger than BDO Unibank in terms of assets.
The government also stands to save about P5.3 billion per year in the next 4 years from the merger, Diokno said.
However, Diokno also admitted that only 22 of DBP’s 147 branches will be retained in the merger, leading to the retrenchment of many workers.
Last year, LANDBANK completed its acquisition of United Coconut Planters Bank.