Gov’t scraps Landbank-DBP merger

The Duterte administration has formally dropped the merger of two state-run banks initially pursued by the previous administration.

This was after the Governance Commission for Government-owned and -Controlled Corporations ( GCG) issued a resolution “cancelling” EO 198 issued by former president Benigno Aquino III.

“Both were crated for different purposes. I don’t see any rational reason to put them together,” Finance Secretary and GCG ex- officio officer Carlos Dominguez said in a statement yesterday.

Dominguez earlier voiced out opposition to the plan, which would have made Landbank the country’s second biggest lender in asset terms.

“Being No.1 or No. 2 (bank) does not matter,” Dominguez said, pointing out that the merger cannot take place without an enabling law passed by Congress.

Landbank’s charter was spelled out under RA 3884, while that of DBP was in RA 85, originally as Rehabilitation Finance Corp.

Advocates of the merger during the previous administration had said GCG could pursue it given its powers under RA 10149 that gave it authority over GOCCs. They added it would make Landbank a stronger bank.

But Department of Finance (DOF), under Dominguez, disagreed.

“Landbank serves the agriculture sector, while the DBP

takes care of the needs of the industry,” Finance department said.

According to the DOF, focus will now be given to ensure that the two lenders perform their functions “efficiently” with public service as “priority.” The GCG resolution, a copy of which remained unavailable as of press time, was signed by new GCG chair Jaime Ma. Flores II and commissioners Michael Cloribel and Samuel Dagpin Jr.

Dominguez and Budget Secretary Benjamin Diokno also signed the document as ex-officio members.