‘Only Congress can amend state banks’
ONLY Congress can grant legislative charters to operationalize governmentowned and controlled corporations (GOCCS), amend their charters, or abolish or merge GOCCs, Albay Rep. Edcel Lagman on Sunday said.
The Development Bank of the Philippines (DBP) was created under Republic Act No. 2081 of 1958 and Land Bank of the Philippines (LBP) was established by RA No. 3844 of 1963.
Both have separate legislative mandates. The proposed merger of DBP and LBP necessitates the amendment of their charters by Congress.
Only Congress can amend or repeal statutes, Lagman stressed. The projected merger cannot legally be effected by a mere executive order, he added. Legislative enactment, not executive fiat, is mandatorily required to operationalize the proposed merger of DPB and LBP, he said.
Earlier, Senator Risa Hontiveros called for an investigation into the proposed merger of the DBP and LBP.
In a proposed Senate Resolution No. 570, Hontiveros emphasized that the merger “raises concerns on the potential risks and benefits it may bring to the economy, the stability of the financial system, and various stakeholders, including the employees of both institutions.”
On March 28, Finance Secretary Benjamin Diokno announced that the government was contemplating a merger between the two state-run financing institutions, with LBP as the surviving entity. This would also create the largest banking institution in the country, with more than P4.179 trillion in assets.
If the merger pushes through, according to Hontiveros, the welfare and livelihood of thousands of employees of both institutions may be at risk. PSR No. 570 also underscored the concerns raised by The Land Bank of the Philippines Employees Association (LBPEA) and DBP Employees’ Union (DBPEU), stating that the LBP and the DBP violated the terms of their Collective Negotiations Agreements by failing to consult with the unions beforehand.
“As the two banks merge operations, it is possible that certain jobs will be eliminated or reduced in size. It will negatively affect employee morale and job satisfaction. Changes in leadership, organizational structure, and company culture can create anxiety.