Incoming Finance Secretary Carlos G. Dominguez was lukewarm to the merger of Development Bank of the Philippines and Land Bank of the Philippines by mere Presidential approval, even as the Bangko Sentral ng Pilipinas (BSP) already started to review the business plan submitted by the state-run lenders.
In a statement Monday, Dominguez said the merger of DBP and Landbank “requires legislative action,” further lamenting that “the GCG’s bids and awards committee for the procurement of advisor was well aware the next administration may have different priorities, but tried to complete the bidding for advisors right before the elections,” referring to the the Governance Commission for Government Owned or Controlled Corporations.
Last February, President Aquino issued Executive Order No. 198, which will facilitate the merger of DBP and Landbank within a one-year timeline, with the latter as surviving entity.
According to Dominguez, he was not “dishonoring” Aquino’s EO, but said “I don’t think it can be done without legislation.”
Prior to the EO, bills on the merger were pending before Congress, but had a slim chance to be passed within the current 16th Congress.
Separately, BSP Deputy Governor Nestor A. Espenilla confirmed last Saturday that the BSP had already received the merger plan from DBP and Landbank, hence will undertake a review of the documents in the next two months.
The BSP official said the BSP was moving forward with the review of the merger plan as mandated under the EO.
The merger must get the nod of the BSP and state-run Philippine Deposit Insurance Corp.
The merger of DBP and Landbank will result into a bank with combined assets of P1.71 trillion, based on end-2015 BSP data.
This will make it the country’s second largest bank in terms of assets and seen challenging local tycoons’ dominance in the banking sector.
The bigger lender to be established from the merger is being eyed to increase loans to infrastructure projects on top of initiatives under their developmental mandate. Ben O. de Vera