House passes DBP, LBP merger bill
THE House of Representatives has approved on third and final reading a bill merging the Development Bank of the Philippines (DBP) and Land Bank of the Philippines (LBP), with LBP as the surviving entity.
House Bill 5755 was approved with a vote of 197-1 on Monday. The bill seeks to improve the financial operations as well as rationalize the operations of the two banks by merging the two.
It also seeks to improve the two banks balance sheets and improve its competitive edge in the local and global market. Moreover, the bill wants to diversify risks and obtain higher lending capacities by fusing the two banks’ universal banking functions.
The bill intends to merge the two banks for its survival in anticipation of the wave of foreign banks that will enter the country upon the Asean integration this year.
The bill authorizes the Governance Commission for Government-Owned and -Controlled Corporation or GOCCs (GCG) to implement the merger within one year of the implementation of the proposed law.
The merger will increase the board membership of the bank to 15 from the current 11.
Article continues after this advertisementThe LBP as the surviving entity will exercise the powers and privileges of the DBP under its 1986 Revised Charter and other laws.
Article continues after this advertisementMeanwhile, all assets and liabilities of DBP will be transferred to LBP.
The bill stipulates that LBP will be managed and preserved by a board of 15 directors, with Secretary of Finance as chairman, and the Secretaries of Agrarian Reform, Labor and Agriculture as ex-officio directors.
Meanwhile, 11 appointive directors will be appointed by the President from a shortlist prepared by the GCG in accordance with the GOCC Governance Act.
The proposed law also provides for a separation and retirement benefit program for the affected personnel who opt to be retired or be separated from service.
The authors of the bill are Representatives Sonny Collantes, Henry Oaminal, Agapito Guanlao, Julieta Cortuna, Delphine Lee, Jorge Almonte, Rodel Batocabe, Rufus Rodriguez, Gus Tambunting, Jose Tejada, Antonio Tinio, and Celso Lobregat. AC
