President Ferdinand Marcos Jr. on Tuesday approved the merger of the leasing and financing units of the United Coconut Planters Bank (UCPB) and the Land Bank of the Philippines (LBP), three years after the merger of the two state-owned banks.
Land Bank of the Philippines Leasing and Finance Corp. (LLFC) was named the surviving entity of the merger of LLFC and United Coconut Planters Bank Leasing and Finance Corp. (ULFC).
READ: Marcos approves ULFC-LLFC merger
In Executive Order No. 65 dated Aug. 6, the President cited the Governance Commission for GOCCs’ (GCG) recommendation to merge the two leasing and financing units.
Best interest
“The GCG en banc finds the merger of LLFC and ULFC to be in the best interest of the State, to eliminate unnecessary overlap in the mandates and functions of the LLFC and ULFC,” EO 65 said.
It added that the GCG also determined that the ULFC “is no longer achieving its expected objectives and purpose” as a government owned and controlled corporation (GOCC).
LLFC and the ULFC are subsidiaries of LBP and UCPB and are attached agencies of the Department of Finance.
The two financing and leasing corporations extend credit to businesses for the acquisition of equipment and other assets.
Integration plan
In June 2021, then President Rodrigo Duterte issued Executive Order No. 142 ordering the merger of LBP and UCPB into one state bank. The merger officially took effect in March 2022.
The merger of the two financing and leasing firms will also mean that the UCPB will transfer all assets, liabilities and ownership shares in ULFC to LLFC.
The President ordered LLFC and UCPB to determine the mode of the merger and to prepare and implement an integration plan. The LLFC was also told to submit a proposed reorganization plan to the GCG within a year.
“Whenever applicable, affected officials and personnel of ULFC may be hired by LLFC, subject to the possession of the necessary service eligibility and other requirements prescribed for the position,” EO 65 said.
It also authorized the ULFC board of directors to adopt a separation incentive package for affected ULFC officers and personnel who will opt for retirement or separation.