MANILA, Philippines — The government expects the legal merger of the Land Bank of the Philippines and the Development Bank of the Philippines (DBP) to finally happen by November as the administration moves to create a single state-run financial institution.
In a briefing late Friday afternoon, Finance chief and economic team head Benjamin Diokno maintained that the merger of the two government financial institutions would best serve the country’s development objectives.
This amid the continued refusal of DBP to accept the merger by simply issuing an executive order.
Based on the indicative timeline, Diokno said the legal merger is targeted to be concluded in six months’ time.
“Following the approval of the GCG (Governance Commission on GOCCs), we now await the issuance of an executive order sometime this month,” Diokno said.
The GCG earlier said President Marcos can implement the merger, through the issuance of an executive order, without waiting for Congress to file and pass related bills.
“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 by November,” Diokno said.
The consolidation of Landbank and DBP, with the former as the surviving entity, will effectively create a single government bank which will be the largest bank in the Philippines.
Combining the two will result in P4.185 trillion in asset size and P3.588 trillion in deposit size.
“Its consolidated resources will also allow it to withstand shocks arising from financial and economic stress,” Diokno said.
The finance chief argued that the merged bank will be in the best position to serve as the sole authorized government depository bank for all state agencies and corporations, government instrumentalities, and local government units.
Diokno noted that a key strategic benefit of having a single government bank is to simplify transactions with counterpart banks, multilateral development banks, and regional development banks.
Likewise, Diokno said the merger aims to achieve synergies that will enhance the efficiency of operations and generate cost savings for the government.
It is estimated that the merger can generate up to P975 million in savings per year through the consolidation of branch operations, on top of the expected reductions in personnel expenses.