Merger of 2 gov’t banks sought
A veteran lawmaker has proposed the merger of two government banks to produce an entity that is more competitive in the banking industry and help a greater number of people and reach more areas of concern.
Quezon Rep. Danilo Suarez filed House Bill No. 135, which calls for the merger of Land Bank of the Philippines and the Development Bank of the Philippines into one entity.
“The increase in asset and resource base of various commercial banks should be a signal to government-owned banks to consolidate and beef up their respective financial positions,” he said.
Suarez said the Land Bank of the Philippines, the largest government-owned bank, has continuously fulfilled its mandate, has helped improve the lives of Filipinos and has transformed rural communities into areas of growth and development.
Meanwhile, the Development Bank of the Philippines, the country’s pre-eminent development financial institution, has consistently taken upon itself the strategic task of influencing and accelerating sustainable growth through the provision of resources for the continued well-being of the Filipino people, he said.
“In order to allow these banks to continue fulfilling their development and social mandate more meaningful, a fusion of the LBP and the DBP is indispensable,” Suarez said.
He noted that it is a fact that financing institutions play a pivotal role in the quest for sustainable growth and development in the country.
“It is likewise recognized that the creation of more financially-stable banks has become imperative after the Asian country crisis, encouraging mergers and acquisitions in the Philippine banking industry,” he said.
Suarez said government banks are not spared of the need for financial viability and strength, “thus the merger of government banks is encouraged to be at par with other commercial and universal banks.”
Under the proposed measure, the LBP shall be the surviving entity being the larger bank in terms of assets and resources.
Suarez said the merger will not affect the mandate of the LBP and the DBP in providing assistance to priority sectors such as small farmers and fisherfolk, micro-enterprises, SMEs, agri-business apart from their commercial banking services.*
