Opposition to Landbank, DBP merger may reach SC

MANILA, Philippines —  The opposition to the proposed merger between Land Bank of the Philippines and the Development Bank of the Philippines (DBP) is likely to reach the Supreme Court if it pushes through.

DBP chairman Dante Tiñga said in a press conference that a case could be filed before the High Tribunal if the merger of the two government financial institutions (GFIs) is done simply through an executive order (EO).

“If the merger is sought to be done by a mere EO, there will be a case before the Supreme Court. If the merger will be done through a law, neither chamber of Congress will pass a law without first studying it and holding hearings,” Tiñga told reporters.

Tiñga said DBP should be consulted first on the impact of the proposed merger with Landbank.

“If we are invited, we will say our piece against the merger,” he reiterated.

According to Tiñga, stakeholders of the state-run bank are likely to file opposition if ever Malacañang issues an EO on the proposed merger between Landbank and DBP.

Tiñga has remained firm against the proposed merger of Landbank and DBP, accusing Finance Secretary Benjamin Diokno of being biased.

The DBP chairman accused the finance secretary of conflict of interest as Diokno is an ex-officio member of the Governance Commission for Government Owned and/or Controlled Corporations (GCG), to which the merger proposal was submitted.

Diokno is likewise the ex-officio chairman of Landbank.

Early this month, Diokno said the proposed merger and consolidation of the two GFIs is likely to take place as early as November this year.

Diokno, who has been pushing for the merger of Landbank and DBP ostensibly to best serve the country’s development objectives, said Malacañang is likely to issue an EO for the proposed merger, with Landbank as the surviving entity.

The GCG had earlier said President Marcos could implement the merger through the issuance of an EO without waiting for Congress to file and pass related bills.

Tiñga said the Office of the Solicitor General (OSG) or the Office of the Government Corporate Counsel (OGCC) should issue the legal opinion on the proposed merger and not the GCG.

DBP president and CEO Michael de Jesus said that both banks have separate mandates.

“When you merge, the advice is that you will have a bigger, stronger bank. But when you merge the two, it won’t be stronger. The way to be stronger is to increase the capital,” De Jesus said.

The veteran banker pointed out that even big banks collapse in the US.

The consolidation of Landbank and DBP would create the largest bank in the Philippines, with a combined asset base of P4.18 trillion and a deposit base of P3.59 trillion.

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.