Senator Win Gatchalian wants an inquiry into the proposed merger between the Landbank of the Philippines (Landbank) and the Development Bank of the Philippines (DBP) which is likely to be finalized by the middle of 2024.
“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,” Gatchalian said, as he filed proposed Senate Resolution No. 697.
“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,” Gatchalian emphasized.
It can be recalled that Finance Secretary Benjamin Diokno in March this year proposed the merger between Landbank and DBP to create a bigger, stronger, and more resilient bank that can better serve the country’s development needs.
Based on figures as of December 31, 2022, the proposed merger will create the largest banking institution in the Philippines with an estimated asset size of about P4.18 trillion once implemented. This is expected to eliminate redundancies and inefficiency in operations, resulting in savings projected at P5.3 billion yearly.
According to Gatchalian, the Government Commission for GOCCs (GCG), in a report submitted to the Office of the President, 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.
In his filed resolution, Gatchalian said that the government should ensure that the operations of GOCCs are rationalized and monitored centrally so that government assets and resources are used efficiently.