Senator Risa Hontiveros on Tuesday called for an investigation into the proposed merger of the Development Bank of the Philippines and the Land Bank of the Philippines.
In a proposed Senate Resolution No. 570, Hontiveros emphasized that the merger “raises concerns on the potential risks and benefits it may bring to the economy, the stability of the financial system, and various stakeholders, including the employees of both institutions.”
On March 28, Finance Secretary Benjamin Diokno announced that the government was contemplating a merger between the two state-run financing institutions, with Land Bank as the surviving entity. This would also create the largest banking institution in the country, with
a total of more than P4.179 trillion in assets.
If the merger pushes through, according to Hontiveros, the welfare and livelihood of thousands of employees of both institutions may be at risk.
PSR No. 570 also underscored the concerns raised by The Land Bank of the Philippines Employees Association (LBPEA) and DBP Employees’ Union (DBPEU), stating that the LBP and the DBP violated the terms of their Collective Negotiations Agreements by failing to consult with the unions beforehand.
“As the two banks merge operations, it is possible that certain jobs will be eliminated or reduced in size. It will negatively affect employee morale and job satisfaction. Changes in leadership, organizational structure, and company culture can create anxiety. Employees should not carry the burden of job uncertainty and financial hardship that will result from this merger,” Hontiveros said.
According to the resolution, coconut farmers are also in peril as this impending merger will “make it even more difficult for the beneficiaries to access support from the fund and will further dilute the mandate of the LBP to assist Coco Levy beneficiaries.”
Likewise, Hontiveros urged Malacanang to not rush the proposed merger and instead devote more time to analyze it extensively, consult with key stakeholders, and resolve not just the legal issues, but all the operational and personal issues voiced out by the employees and the
small coconut farmers.
“Hindi ko maintindihan kung bakit minamadali. Sa paglalakad na ito ng matulin, ang mga empleyado ng dalawang banko at coco levy beneficiaries ang matitinik ng malalim. Hindi ba dapat ayusin muna ang mga isyu gaya ng non-payment of benefits o proper turnover bago umarangkada na naman sa panibagong merger?” the Senator said.
Hontiveros earlier warned that the merger would result in a financial entity “too big to fail” as the 2008 global financial crisis proved that large banks are riskier, and tend to introduce more systemic risk into the financial system.
“There is a need for the government to proceed cautiously and prudently vis-à-vis the contemplated merger, as well as clarify all legal issues involved, for the purpose of ensuring that this does not prejudice the country’s economy, the stability of the financial system, and the welfare of affected employees and depositors,” the resolution stated.