MANILA, Philippines — The Governance Commission on GOCCs (GCG) has yet to recommend whether to proceed or not with the legal merger of the Land Bank of the Philippines and the Development Bank of the Philippines (DBP).
During a hearing yesterday by the Senate Committee on Finance on GCG’s 2024 budget, newly appointed GCG chairperson Marius Corpus said discussions are ongoing on the proposed creation of a single state-run financial institution.
“We are in the process of getting inputs from the various stakeholders. It’s a continuing process,” Corpus said.
“We have instructions to get more comments from various agencies. We are not yet in a position to make a recommendation to the OP (Office of the President),” he said.
This, even after Finance Secretary Benjamin Diokno said the DOF has already submitted a draft executive order on the merger that President Marcos can consider for signing last May.
Sought for clarification, Finance Undersecretary and spokesperson Maria Luwalhati Dorotan-Tiuseco said “the OP is seeking answers to some questions.”
According to Corpus, inputs are still being sought from Landbank, DBP, DOF and the Department of Budget and Management.
Just last week, Corpus said GCG had a meeting with DBM and DOF to thresh out some issues.
“It was agreed that they will still submit further recommendations on whether to proceed with the merger,” Corpus said.
Asked by senators if it can make a recommendation next month, the GCG chair said it “cannot guarantee,” but can be done “hopefully by end of the year.”
Based on Diokno’s timeline, the merger is eyed for Bangko Sentral ng Pilipinas approval by the end of the year and for full completion by mid-2024.
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.
During the hearing, the GCG said the DBM slashed its 2024 budget by 50 percent to P210.881 million from this year’s allocation of P421.686 million.
As such, the GCG is requesting an additional P168.421 million for 2024 to cover additional personnel service of P84 million, and enhancement of major information and communications technology projects and capabilities at P64.73 million.
It is also proposing an extra P15.157 million to increase its operational capacity and P4.425 million to host the 2024 Organisation for Economic Cooperation and Development Asia Meeting.
Further, the GCG said 31 GOCCs have been approved for abolition and are in the various stages of liquidation of assets to cover the liabilities incurred by the government.
Some 26 others have been classified as inactive, non-operational or deactivated, three are up for privatization, and two for merger.
There are a total of 118 GOCCs under GCG, majority of which are financial institutions, trade, area development and tourism, utilities and communications, and realty and holding companies.
Last year, GOCCs remitted P48.63 billion in dividends to state coffers, up by 23 percent.