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Thursday, April 18, 2024

‘LBP-DBP merger must be covered by a law’

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THE merger of Land Bank of the Philippines (LandBank) and Development Bank of the Philippines (DBP) might be challenged before the Supreme Court by possibly affected stakeholders like farmers if the proposal pushes through, a DBP official cautioned.

DBP Chairman Dante O. Tiñga warned that the merger would be most likely “questioned” by “affected” stakeholders before the High Court if the merger between the two state-owned banks materializes through an Executive Order (EO).

Tiñga maintained that the only way the merger could happen is through legislation, since the two banks were created by laws.

“There are persons or sectors that will be a victim [of the merger], the coconut farmers, for example,” Tiñga told reporters in an interview on Thursday.

Tiñga also emphasized that a technical study regarding the proposed merger remains imperative to determine the implications of such a proposal to the economy.

Tiñga added that he does not see President Ferdinand R. Marcos Jr. issuing the EO regarding the merger of LandBank and DBP within the month.

Finance Secretary Benjamin E. Diokno earlier announced that the EO could be issued before the month ends, with the merger being done by November.

DBP President Michael de Jesus, meanwhile, said it is also necessary to conduct a comprehensive review of the charters of the two state-run banks to delineate their roles and functions.

However, de Jesus noted that a “perfect” charter does not exist and certain overlapping of roles and functions between the two banks would always happen.

Nonetheless, he pointed out that it is critical to determine the “predominant” roles and functions of the two banks in tackling a possible merger.

He noted that there are pending and ongoing inquiries and reviews at both chambers of Congress regarding the charters of DBP and LandBank, which the former supports.

Nonetheless, De Jesus mentioned that there is “too much” overlapping between the functions of the two banks at present.

Last month, the Governance Commission for Government-Owned or Controlled-Corporations (GCG) opined that the merger of the two state-run banks can happen “without the need for legislative action.”

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