The Governance Commission for Government-Owned or -Controlled Corporations said Tuesday it welcomes studies and inquiries that will help inform the government’s decision on the proposed merger of the Land Bank of the Philippines and the Development Bank of the Philippines.
“We welcome all resolutions, inputs and study that will provide the commission better understanding and information to determine whether it is appropriate to merge the concerned government financial institutions,” GCG Commissioner Gideon Mortel said in a statement.
The GCG recently submitted to the Office of the President a legal study that says that the proposed merger of the two state-run banks could be done through executive action.
The study says that Republic Act No. 10149 or the GOCC Governance Act of 2011, among other legal bases, statutes and applicable jurisprudence, empowers the GCG to ascertain whether such GOCCs should be merged.
Senator Risa Hontiveros, in a resolution dated April 17, 2023, called for an investigation, in aid of legislation, into the proposed merger of the two GFIs.
Hontiveros raised concerns over the potential risks and benefits the merger may bring to the economy, the financial system and stakeholders.
Mortel said that any further inquiry on the proposed merger would provide better light on whatever determination GCG would have.
Finance Secretary Benjamin Diokno announced in March 2023 that the government was contemplating a merger between the two financing institutions, with the LandBank as the surviving entity. The merger is expected to create the largest banking institution in the country, with a total of more than P4.179 trillion in assets.
Mortel clarified that the GCG legal study submitted to the President only resolves whether the merger requires legislation. It does not indicate just yet any decision from the commission regarding the proposal for merger.
He said that the commission was still studying the positions of stakeholders such as the Philippine Competition Commission, Commission on Audit, Department of Finance, LandBank and DBP.
He said the Commission was looking into various aspects of the proposed merger, including operational efficiency, market reach, enhancement of new product lines and geographic reach.