THE MERGER of state-led banks Land Bank of the Philippines (LANDBANK) and Development Bank of the Philippines (DBP), with the former emerging as the country’s biggest in terms of assets, is not seen to have an effect on competing private banks.

“The merger should not have a significant impact on the level of bank competition. We have a sufficient number of banks, with fintech companies even offering additional competition,” said Enrico P. Villanueva, University of the Philippines Los Baños economics senior lecturer, in a Twitter message to BusinessWorld.

Mr. Villanueva said private banks should not be concerned with LANDBANK gaining a monopoly on government deposits as there is not much difference between one and two bank options.”

The merger can benefit the government as it will widen free ATM access for government depositors, he added.   

Mr. Villanueva also noted that the DBP management was being vocal against the union due to fears of losing jobs.

DBP on April 19 filed an appeal with the Office of the President, claiming that the merger with LANDBANK requires a new law, contrary to a study by the Governance Commission for Government-owned or Controlled Corporations (GCG).

BDO Unibank, Inc. President and Chief Executive Officer Nestor V. Tan likewise said that the merger will not have an impact on private banks as “it’s not an overlap in most areas.”

“I think the LANDBANK and DBP merger won’t have much impact on private institutions because historically, they’ve been in a different market segment,” he said at a briefing on April 19.

However, Mr. Tan said that private institutions could benefit from having government deposits opened up to them.

“Those businesses should be opened up to competition so the government can have better service, but of course, they have their reasons,” he said.

He also hinted that the Bankers Association of the Philippines could also be taking steps to have government deposits opened up to private banks in areas with no government banks.

According to data from the Bangko Sentral ng Pilipinas, BDO stood as the number one bank in terms of assets at P3.924 trillion as of Dec. 31, 2022. The Sy-led bank was followed by LANDBANK, with its assets at P3.137 trillion.

BDO saw its net income rise by 40.44% to P16.528 billion in the first quarter amid growth across its core businesses. Its shares went up by P5.50 or 4.25% to close at P135 apiece on Thursday. — Aaron Michael C. Sy

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