President Ferdinand R. Marcos Jr. on Tuesday supports the plan to merge the state-controlled Land Bank of the Philippines (Landbank) and Development Bank of the Philippines (DBP) to create the country’s largest bank entity.
“The President expressed the desire to merge the two, to make it the biggest bank of the country because of the recent financial developments abroad. And that’s really the best practice. The biggest bank is usually owned by the state, globally,” Diokno said in a Palace press briefing.
Diokno said Marcos initially expressed concern that merging the two banks would mean that services provided by either bank would be lost.
In 2016, Marcos also opposed the merging, saying it will deprive farmers of an agricultural bank that is mandated to serve their needs.
Diokno, however, said they assured the President that the two banks “do almost the same” and will result in savings of at least P5.3 billion per year.
“Given what’s happening now globally, you have banks which are now being closed right? For example, Credit Suisse. Who would have thought Credit Suisse would go under? So, there’s really a strong need for solidifying the government bank,” he said.
“We’re not saying that the current system is broken but as policy-makers, we have to constantly seek better ways of doing things, especially if we want to improve the performance of particular government agencies,” he added.
Diokno said the merger is also consistent with Marcos’ goal to rightsizing the government bureaucracy.
“If we are able to do that successfully, then we’ll have more money for really essential projects like healthcare, education and infrastructure,” he added.
Diokno said the merger is expected to take effect “before the end of the year.”
Diokno likewise said the merger will cause in some layoffs, but assured that separation packages will be given to the said employees.
CURRENTPH NEWS SERVICE