GCG asserts mandate to evaluate Landbank-DBP merger
MANILA -The proposed merger between Land Bank of the Philippines and Development Bank of the Philippines (DBP) has gained traction as the Governance Commission for Government-Owned and Controlled Corporations (GCG) vowed to ensure a seamless process while asserting its oversight mandate.
At the same time, the Federation of Free Farmers (FFF) and think tank Centro Saka Inc. expressed opposition to the union, saying this would not redound to the growth of the country’s agriculture sector.
GCG Chair Alex Quiroz said in a statement on Thursday that the policymaking body intended to promptly submit to the Office of the President its recommendation regarding “the proposed merger.”
The GCG was part of a sectoral meeting held on March 29 at Malacañang, during which President Marcos “approved” the merger.
“GCG will have to look into the specifics of the merger as it involves two major banks that are state-owned,” Quiroz said.
“We want to ensure that the merger is seamless and will not disrupt or cause issues or concerns in their respective operations and processes,” he added.
Article continues after this advertisementFurther, Quiroz said ensuring that the merger of the two state-run banks would be beneficial to the government was within the GCG’s jurisdiction.
Article continues after this advertisementCreated under Republic Act No. 10149 of 2011, GCG is the central policymaking and regulatory body mandated to safeguard the state’s ownership rights and ensure that the operations of GOCCs are transparent and responsive to the needs of the public.
Oversight
GCG Commissioner Gideon Mortel expressed gratitude that the President “recognizes the oversight function” of the GCG on the matter of the Landbank-DBP merger.
Finance Secretary Benjamin Diokno, the main proponent of the merger in the Marcos administration, is of the view that the union could be effected upon the recommendation of the GCG alone. The DBP management, on the other hand, calls for an enabling law from Congress. In recent weeks, DBP has voiced opposition to the union, which is expected to create the country’s largest bank.
The GCG noted that plans for this merger had been raised in previous administrations, but it came across several stumbling blocks, such as the difference in the mandate of the two banks.
DBP’s charter describes it as a development bank that may perform all other functions of a thrift bank, with the main objective of catering to agricultural and industrial enterprises, especially small and medium-scale firms.
Meanwhile, Landbank’s mandate is to promote countryside development and provide credit assistance to small farmers and fisherfolk as well as agrarian reform beneficiaries.
Also, the GCG said its evaluation of the merger “will cover all areas and are considered of utmost importance” considering that both banks have been named as sources of startup funds for the planned Maharlika Investment Fund.
Not related to Maharlika
But Diokno said “there is absolutely no link” between the Landbank-DBP merger and the sovereign wealth fund.
“The late President Benigno Aquino III signed an executive order merging Landbank and DBP during his term but was not implemented,” Diokno said.
In a joint statement, the FFF and Centro Saka said it would be all the same for them whether Landbank and DBP remained separate or were merged.
Landbank “has strayed far from its principal task of servicing small agricultural producers,” they said. “Merged or not, it will be hard-pressed to deliver on the current administration’s goals of food security, farmers’ prosperity and poverty reduction.”
And yet, the two groups echoed the DBP board and management, saying the respective charters of Landbank and DBP would have to be amended to merge the two banks.
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