PRESIDENT Aquino has approved the merger of the Development Bank of the Philippines (DBP) and the Land Bank of the Philippines (LBP).
Executive Order (EO) No. 198 on the merger of the two state banks, signed by the President last February 4, noted the “need to rationalize the operation of government agencies and government financial institutions (GFIs) to strengthen their financial capabilities, to improve the delivery of services, to achieve economic efficiency and to support the development thrust of the government”.
According to the EO, the Governance Commission for GOCCs (GCG) has determined that “it is in the best interest of the State to merge DBP and LBP” due to the overlap in the functions of the two banks.
It stated that their merger will further enhance the financing of priority projects and sectors such as infrastructure, public services, agriculture/agrarian reform and SMEs; provide better access and extend quality financial services and products to more unbanked and underserved areas; and build a stronger and more competitive universal development bank able to fulfill its mandate of providing banking services to propel countryside development and contribute to sustainable and inclusive growth.
According to EO 198, the “operational merger of DBP and LandBank, through the transfer of assets and liabilities of DBP to LBP as the surviving entity, is hereby approved, subject to the written consent of the Philippine Deposit Insurance Corporation and approval of the Bangko Sentral ng Pilipinas”.
The Executive Order further stated that to allow the LBP to continue supporting the government’s sustainable and inclusive growth agenda, the Department of Finance and the Department of Budget and Management have been directed to “provide a capital infusion to LBP of at least P30 billion, to be sourced from existing funds if allowed by law, or to be included in the General Appropriations Act for the succeeding years”. (PND)