THE MERGER between state-run lenders Land Bank of the Philippines (LANDBANK) and Development Bank of the Philippines (DBP) will likely be completed by the first of half of next year, Finance Secretary Benjamin E. Diokno said last week.
“We have submitted the executive order (EO) to the Office of the President. It’s going through what’s called a complete staff work. We expect that to be approved soon. We feel that by around the fourth quarter, it will be with the Bangko Sentral ng Pilipinas (BSP). I think it will be approved by the BSP before the end of the year,” Mr. Diokno said in a press chat in Pasay City on Friday.
“But that isn’t even finished yet. It has to go through a process, so around the middle of next year will be the full completion. That’s a reasonable timetable. By the first half of the year,” he added.
In March, President Ferdinand R. Marcos, Jr. ordered the merger of the two lenders. It was initially expected to take effect before the end of the year.
The merger, which would leave LANDBANK as the surviving entity, will create the sole authorized government depository bank.
It also aims to consolidate financial resources and simplify transactions with counterparty banks and multilateral lenders.
The Governance Commission for Government-Owned and -Controlled Corporations (GCG) earlier said that it can authorize the merger without legislation.
Meanwhile, the DBP has said that the GCG does not have the authority to consolidate both banks. The merger would require legislation as both banks were created by law, it added.
The DBP has also noted risks that could arise from the merger, including a potential bank failure.
Data from the Department of Finance showed that the merged entity will have an asset size of P4.185 trillion and deposits of P3.588 trillion.
The merger is also expected to generate up to P975 million in savings annually. — L.M.J.C. Jocson