Finance Secretary Diokno Defends Proposed Merger of Land Bank and DBP

Key Highlights :

1. The Finance Secretary is defending the proposed merger of the Land Bank of the Philippines and the Development Bank of the Philippines, which he says will eliminate the redundancy and inefficiency in operations.

2. The projected operating cost savings due to the merger could reach at least P5.3 billion per year, or more than P20 billion over the next four years.

3. The merger aims to achieve synergies that will enhance the efficiency of operations and generate cost savings for the government.

4. Following the approval of the GCG, the Finance Secretary said he will be willing to participate in any Senate inquiry on the proposed merger.

     The Department of Finance (DOF) is supporting the move to consolidate the Land Bank of the Philippines and the Development Bank of the Philippines (DBP) into a single government bank. Finance Secretary Benjamin Diokno has defended the proposed merger, saying that it will eliminate the redundancy and inefficiency in operations and generate cost savings for the government.

     The projected operating cost savings due to the merger could reach at least P5.3 billion per year, or more than P20 billion over the next four years. Diokno said that the merger aims to achieve synergies that will enhance the efficiency of operations and generate cost savings for the government. He also said that he will be willing to participate in the possible Senate inquiry on the proposed merger.

     The Finance chief said those who will be separated due to the merger will receive a "fair package of benefits in recognition of their valuable service to the government." He also said that the Supreme Court has upheld the constitutionality of the Governance Commission for Government-Owned and Controlled Corporations (GCG) Law, which provides for the powers of the GCG to merge GOCCs with charters.

     Following the approval of the GCG, an Executive Order is expected to be issued sometime this month. This will be followed by the joint crafting and approval of the Operational Integration Plan in September, followed by the approval of the Monetary Board in October, before the final legal merger between LANDBANK and DBP by November. The GCG has also expressed openness to any inquiry on the proposed merger of LandBank with the DBP.

     The proposed merger of LandBank with the DBP was approved by the President during their sectoral meeting. Diokno has said that the move will eliminate redundancy and inefficiency in operations and generate cost savings for the government. He also said that those who will be separated due to the merger will receive a "fair package of benefits." The DOF is supporting the move to consolidate the two banks into a single government bank, with the aim of achieving synergies that will enhance the efficiency of operations and generate cost savings for the government.

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